Molly will receive an insurance settlement of $2, 000, 000 in six years.Randal is willing to give her a lump sum today in return for the payment in six years.If current interest rates are 12% per year, how much will Molly receive today?

A) $ 960, 637
B) $1, 013, 262
C) $1, 116, 790
D) $1, 186, 903

Insurance Settlement

The amount paid by an insurance company to a policyholder or claimant as compensation for a covered loss.

Lump Sum

A single payment made at a particular time, as opposed to a series of smaller payments or installments.

Interest Rates

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.