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You have recently won the MegaMillion Lottery in the State of Idaho. On further reading, you realize that you have two payout options as follows:
You have recently won the MegaMillion Lottery in the State of Idaho. On further reading, you realize that you have two payout options as follows: a. You will receive 30 annual payments of $280,000 with the first payment received immediately. You will have to pay income taxes of 30% (withheld from each check). or b. You will receive $500,000 now and receive annual payments of $180,000 each year for 25 years starting in year 5. Taxes of 30% will also be withheld from each check Using an interest rate of 10%, which option will you prefer and why?
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