You won a breakfast cereal competition. You can choose one from the following prizes:
1) $200,000 today
2) $300,000 at the end of 5 years
3) $24,000 a year forever
4) $37,500 a year for the next 10 years
5) $12,500 next year and increasing thereafter by 6% a year forever
If the interest rate is 12% what is the most valuable prize?
If the interest rate is 8% what is the most valuable prize?