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Present Value.Winners of the Georgia Lotto drawing are given the choice of receiving the winning amount divided equally over 18 years or as a lump-sum

Present Value.Winners of the Georgia Lotto drawing are given the choice of receiving the winning amount divided equally over 18 years or as a lump-sum cash option amount. The cash option amount is determined by discounting the annual winning payment at 5% over 18 years. This week the lottery is worth $16 million to a single winner.

What would the cash option payout be?

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