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you and your brother bill play the lottery each week. After 5 years of playing you finally won a prize. The Ontario Lottery commission has
you and your brother bill play the lottery each week. After 5 years of playing you finally won a prize. The Ontario Lottery commission has given you two options. Option 1 is for you to take a lump sum payment of $1000, option 2 will pay you $1750 at the end of 5 years. Using a discount rate of 5% which would you choose? Using the same discount rate of 5% based on future values, which would you choose? Which option is more advantageous purely based on the concept of the time value of money?
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