Value of an annuity versus a single amount Personal Finance Problem Assume that you just won the stato lottery. Your prize can be taken orthor in the form of $61 000 at the end ot each of the next 30 years that is, 51, 830 000 over 30 years) or as a single amount of 51.248,000 paid immediately a. If you expect to earn 6% annually on your investments over the next 30 years, ignoring taxes and other considerations which alternative strould you take? Why? b. Would your decision in part a change if you could earn 89 rather than 8% on your investments over the next 30 years? Why? c. At approximately what interest rate would you be Indifferent between the two options? a. To decide which alternative to take you need to compare the values of these alternatives. Although the total nomina dolar amount of the annuity much larger than the singlo payment, the former is not necessarily a bottor choice o to the different timing of cash Bows Away to make a meaningful comparison of the two alomatives is to compare their present values if you take the prize as an annuity, the present value of the 30-year ordinary anhusty is $ 8396547 (Round to the nearest cont) If you take the prize as a single amount, the present value of the timp sum is sl (Round to the newest dollar)