Yuma, Arizona resident Rosalind Setchfield won $I.3 million in an Arizona lottery drawing, to be paid in

Question:

Yuma, Arizona resident Rosalind Setchfield won $I.3 million in an Arizona lottery drawing, to be paid in 20 annual installments of S65,277. However, her husband, a construction worker, suffered serious injuries when a crane dropped a heavy beam on him. The couple’s medical expenses and debt mounted. Six years later, in early 2015, a prize broker from Singer Asset Finance Co. telephoned Mrs. Setchfield with a promising offer. Singer would immediately give her $140,000 for one-half of each of her next nine prize checks (1/2 X 9 X $65,277 = $293,746), an amount close to 48% of the $293,746 she had coming over that period. A big lump sum had obvious appeal to Mrs. Setchfield at that time, and she ended up signing a contract with Singer. Did she make the right decision? Table ST3.2 gives the details of the two options: