Pauline won a Financial Analyst competition and had the following to choose from i. Option 1: $20, 000 to be paid at the end of each month for 4 years with an interest rate of 6% compounded monthly plus a lump sum of $100,000OR ii. Option 2: $40,000 to be paid at the start of each quarter four 4 years with an interest rate of 8% compounded quarterly plus a lump sum of $150, 000OR iii. Option 3: $200,000 to be paid annually for 4 years with an interest rate of 8% which increases by 3% plus a lump sum $120,000. What is the value of the three options presented? Which option should Pauline select and why? 10 Marks.

1. Pauline won a Financial Analyst competition and had the following to choose from i. Option 1: $20,
000 to be paid at the end of each month for 4 years with an interest rate of 6% compounded
monthly plus a lump sum of $100,000OR ii. Option 2: $40,000 to be paid at the start of each
quarter four 4 years with an interest rate of 8% compounded quarterly plus a lump sum of $150,
000OR iii. Option 3: $200,000 to be paid annually for 4 years with an interest rate of 8% which
increases by 3% plus a lump sum $120,000. What is the value of the three options presented?
Which option should Pauline select and why? 10 Marks