Question
Yuma, Arizona resident Rosalind Setchfield won $1.3 million in an Arizona lottery drawing, to be paid in 20 installments of $65,277. However, her husband, a
Yuma, Arizona resident Rosalind Setchfield won $1.3 million in an Arizona lottery drawing, to be paid in 20 installments of $65,277. However, her husband, a construction worker, suffered serious injuries when a crane dropped a heavy beam on him. The couples medical expenses and debt mounted. Six years later, in early 2015, a prize broker from Singer Asset Financing Company telephoned Mrs. Setchfield with a promising offer. Singer would immediately give her $140,000 for one-half of each of her next nine prize checks (1/2 * 9 * $65,277 = $293,746), an amount close to 48% of the $293,746, she had coming over that period. A big lump sum had obvious appeal to Mrs. Setchfield at that time, and she ended up signing a contract with Singer. Did she make the right decision? The following table gives the details. Beginning of Year
Year Installment Proposal
2008 $65,277 $65,277
2009 $65,277 $65,277
2010 $65,277 $65,277
2011 $65,277 $65,277
2012 $65,277 $65,277
2013 $65,277 $65,277
2014 $65,277 $65,277
2015 $65,277 $32,638.50
2016 $65,277 $32,638.50
2017 $65,277 $32,638.50
2018 $65,277 $32,638.50
2019 $65,277 $32,638.50
2020 $65,277 $32,638.50
2021 $65,277 $32,638.50
2022 $65,277 $32,638.50
2023 $65,277 $32,638.50
2024 $65,277 $65,277
2025 $65,277 $65,277
2026 $65,277 $65,277
2027 $65,277 $65,277
Please use excel to solve
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