Mary won $6.5 million in the Lottery. She must choose how she wants her prize to be paid. First, Mary can elect to receive 26 annual payments, with the first payment due immediately. Second, she can elect to receive a single payment for the entire amount. However, if the single payment option, the winning prize is reduced to 60% of the winning. What rate would make Mary indifferent about these two options?

26 Annual Payments

N = I/Y = PV = PMT = FV =

1 Payment

Amount: