Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Please show all the work You just won the lottery for $79,000,000. The lottery offers a choice of either getting a lump sum payment (a

image text in transcribedPlease show all the work

You just won the lottery for $79,000,000. The lottery offers a choice of either getting a lump sum payment (a chunk of money now, less than the 79mm), or receiving 23 equal and annual payments over the next 23 years, with the first payment coming at the end of the year. Assume an interest rate of 7.5%. You're trying to decide whether its better to take the lump sum, or the annual payments. What is the minimum amount that lump sum must be worth to be worth taking the lump sum payment (use your calculator)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Remittances And International Development

Authors: Sabith Khan, Daisha Merritt

1st Edition

0367521881, 978-0367521882

More Books

Students explore these related Finance questions

Question

L A -r- P[N]

Answered: 3 weeks ago