In August 1998, thirteen lucky machinists from Ohio pooled their money to buy lottery tick- ets and won a price that had been advertised as a record $295.7 million. Later on, the winners were informed that the sum was to be paid in 25 equal annual instalments of $11.828 million each 12 months (the first payment would only occur after 1 year). As an alternative, the lot- tery operator offered an arrangement for the winners to accept an immediate lump sum pay- ment of 153.8 million. Was this a fair offer? The interest rate was 5.9 percent at that time