Question: Marcus has won a $3,000,000 state lottery. He can take his prize as either 15 yearly payments of $200,000 or a lump sum of $1,520,000.

Marcus has won a

$3,000,000

state lottery. He can take his prize as either

15

yearly payments of

$200,000

or a lump sum of

$1,520,000.

Which is the better option? Assume an interest rate of

10%.

(In the case of annual payments, assume that the 1st one will be one year from now.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!