You have won a mega-jackpot playing the slot machines in Las Vegas. You have to choose between

Question:

You have won a mega-jackpot playing the slot machines in Las Vegas. You have to choose between two payout plans. The first would pay you $7 million immediately. The second would pay you $1 million per year for 10 years, with the first payment occurring at the end of period 1, and the last payment occurring at the end of period 10.
a.) If your personal is 5%, which plan has a higher economic value?
b.) If your personal is 10%, which plan has a higher economic value? Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...