Answered

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15. You've just won $10 million in a lottery, and the payout is 1/25 of the
jackpot ($400,000) payable at the end of each year for 25 years. Alternatively,
you have the option of receiving your payout as a $3 million lump sum.

A)what is the present value of the annuity if your investments earn 8%
B) what is the present value of the annuity is your investments earn 10%?
C) based on the present value calculations is it better to take the lump sum or annuity

Sagot :

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