You just won a $$2\mathrm{.}5$ million lottery. You can choose between receiving: $$1$ million today or $$100,000$ per year for $25$ years. Assuming you think you, can earn $10$ percent per year on your investments, compounded annually, which of these alternatives is a better deal?

You just won a $$2\mathrm{.}5$ million lottery. You can choose between receiving: $$1$ million today or $$100,000$ per year for $25$ years. Assuming you think you, can earn $10$ percent per year on your investments, compounded annually, which of these alternatives is a better deal?

The $$1$ million lump sum is a better deal because it has a higher present value than the annuity.

The $$100,000$ annuity is a better deal because it has a higher present value than $$1$ million.

The $$100,000$ annuity is a better deal since you will end up receiving a total of $$2\mathrm{.}5$ million.

There is not enough information to answer this question.