**Answer:**

Doug Stamper

The CORRECT statement is:

b. Option A is the best choice because it has the largest present value.

**Explanation:**

a) Data and Calculations:

Option A: $2,000 per month for 84 months is worth PV = $136,906.08:

N (# of periods) 84

I/Y (Interest per year) 6

PMT (Periodic Payment) 2000

FV (Future Value) 0

Results

PV = $136,906.08

Sum of all periodic payments $168,000.00

Total Interest $31,093.92

Option B: $1,100 per month for 15 years is worth PV = $130,353.87:

N (# of periods) 180

I/Y (Interest per year) 6

PMT (Periodic Payment) 1100

FV (Future Value) 0

Results

PV = $130,353.87

Sum of all periodic payments $198,000.00

Total Interest $67,646.13

Option C: $125,000 lump sum today is equal to PV.