Question $6$

Eric just won $$13$ million in the state lottery. He's been given the option of receiving a total of $$6\mathrm{.}6$ million now, or he can elect to be paid $$600,000$ at the end of each of the next $35$ years. If Eric can earn $9\%$ annually on his investments, which option should he take?

Exam $1$ Formula Sheet.pdf

Excel.x$|$sx

He should take the ordinary annuity because the present value of the ordinary annuity is greater than $$6\mathrm{.}6$ million.