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You won the lottery for $300 million dollars! You can take a lump sum amount today in the amount of $92,495,600 (ignore income taxes). Or
You won the lottery for $300 million dollars! You can take a lump sum amount today in the amount of $92,495,600 (ignore income taxes). Or you can receive an annual payment amount (annuity) for the next 30 years. Use the present and future value tables in your book, a financial calculator, or Excel determine the amount of the annual payment based upon a discount rate of 4%. Which option would you choose and why? Think about one of your financial goals; a purchase you would like to make within the next five years.
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