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Congratulations, you have won the lottery! Your winnings are $500 million dollars. You have two choices, lump sum or equal yearly payments over 20 years.
Congratulations, you have won the lottery! Your winnings are $500 million dollars. You have two choices, lump sum or equal yearly payments over 20 years. Determine which option gives you more money using a Present Value calculation. Part A Assume the following: 1. Interest rate (yearly) 5% 2. Tax Rate (at the receipt of winnings) 30% 3. Lump sum is 60% of winnings 60% Part B - which option is better if the interest rate is 10%
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