Kelly won the lottery. As a lottery winner, she has the choice of either taking an immediate
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Kelly won the lottery. As a lottery winner, she has the choice of either taking an immediate lump sum payment of $350,000 or a perpetuity of monthly payments of $2,000 each. The first monthly payment of $2,000, she can collect in one month. Both schemes are tax free!
If the annual discount rate is 6% compounded monthly, which scheme should she take in order to maximize her winning?
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0134141084
11th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
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