You are a lucky winner of the $30 million state lottery. You can take your prize money
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Question:
You are a lucky winner of the $30 million state lottery. You can take your prize money either as:
a) 30 payments of $1m per year (starting today);
b) 15 million paid today.
If the APR is 8% with annual compounding, which option would you choose?
How much would payment option (a) be worth at t=0 / today, in millions?
Related Book For
Macroeconomics Principles, Applications, and Tools
ISBN: 978-0132555234
7th Edition
Authors: Arthur O Sullivan, Steven M. Sheffrin, Stephen J. Perez
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