Question
You have just won a state lottery! You have the option of receiving equal annual payments of $465,000 for 30 years, or a lump sum
You have just won a state lottery! You have the option of receiving equal annual payments of $465,000 for 30 years, or a lump sum amount today. The acceptable interest rate is 5.6 percent. If the state offers you a one-time payment of $7.9 million today, should you accept it?
A. No, because today's value of the annual payments is greater than $7.9 million
B. Yes, because today's value of the annual payments is $6,684,197
C. Yes, because today's value of the annual payments is $4,721,922.09
D. No, because today's value of the annual payments is $13,950,000
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