Question
In: Finance
Your dreams of becoming rich have just come true. You have won the State of Tranquility's...
Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the $6,000,000 advertised jackpot. You can take annual payments of $300,000 at the end of the year for the next 20 years or $2,945,444 today.
a. If your investment rate over the next 20 years is 9%, which payoff will you choose?
b. If your investment rate over the next 20 years is 6%, which payoff will you choose?
c. At what investment rate will the annuity stream of $300,000 be the same as the lump-sum payment of $2,945,444
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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