In: Finance
Your girlfriend just won the Florida lottery. She has the choice of $50,000,000 today or a 20-year annuity of $3,850,000, with the first payment coming one year from today. If the mutual fund of hers provides 4% of return each year for the next 20 years, which payment option is more attractive to her?
a. $50,000,000
b. 20-year annuity of $3,850,000
c. The two are the same
d. Could not tell