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Assume that you have won a mini $6,000 lottery. You are provided with two options: a. Receive 6 installments of $1,000 every year, with the
Assume that you have won a mini $6,000 lottery. You are provided with two options: a. Receive 6 installments of $1,000 every year, with the first installment paid out today, OR b. Receive $6,750 six years from today. If you are a rational investor - which I am sure you are - and the appropriate rate of interest is 2.5%, which option would you take and why? Provide quantitative calculations and support for your choice
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