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Georgia Lotto winners can choose a lump-sum cash option payout instead of receiving the winning amount in equal payments over 20 years. The lottery is
Georgia Lotto winners can choose a lump-sum cash option payout instead of receiving the winning amount in equal payments over 20 years. The lottery is worth $6 million to a single winner. Cash option is determined by discounting the winners $6 million at 7% over 20 years. What is the cash option payout? (Hint: you need to compute the payment per year the winner would get if he or she did not choose the cash option as a preliminary step.)
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