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Homework: 2 Name: (1) Congratulations! You have just won the Lottery. The Lottery Commission informs you that you can choose between three different pay out
Homework: 2 Name: (1) Congratulations! You have just won the Lottery. The Lottery Commission informs you that you can choose between three different pay out options: (1) $5 00,000 cash payment today, (2) $5 0,000 cash payments at the end of each year for twenty years, or (3) $1,000,000 in cash in one payment after 20 years. Current CD's are paying 3.50% annual interest. Which do you choose and why? Hint: Calcufate the PV of each pay out option, then select highest PV
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