P$3-20.$ Alture that you lunt won the state lottery, Your prize can be taken either in the form of $$40,00.$ he end oach of the next twenty$-$five years $($ie$,$ St million over twenty$-$five years$)$ or as a lump sun of $$500,000$ paid immediately.

$2$ I you expect to be able to cam $5\%$ annually on your investments over the next twenty$-$five years, which alternative should you take? Why?

b Would your decision in part a$)$ be altered if you could earn $7\%$ rather than $5\%$ on your invest. ments over the next twenty$-$five years? Why?

c At approximately what interest rate would you be inferent when choosing between the two plans