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Su Mei has just won a lottery. She will receive a payment of $5,120 at the end of each year for 12 years. As an
Su Mei has just won a lottery. She will receive a payment of $5,120 at the end of each year for 12 years. As an alternative, she can choose an immediate payment of $55,930.
- Which alternative should she pick if the interest rate is 6 percent?
Su Mei should pick:Immediate payment OR Payment at the end of each year
2. What would the interest rate have to be for Su Mei to be indifferent about the two alternatives?(Round answer to 4 decimal places, e.g. 25.2341%. Do not round your intermediate calculations.)
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