Question: When you win the Mega Millions lottery, you can elect to take 30 annual payments or a cash option. The annuity option will pay you

When you win the Mega Millions lottery, you can elect to take 30 annual payments or a cash option. The annuity option will pay you the full amount of the advertised Mega Millions jackpot over the next 29 years (30 payments, with the first payment immediately). The annual payments will increase by 5.000% each year. So it is a growing annuity due. Suppose June 20, 2023, was your lucky day, and you were the only winner of the $300 million jackpot! If you choose the annuity, the 30 payments you would receiveignoring the time value of moneywould sum to $300 million. If you choose the cash option, the immediate one-time payout is $156.0 million; assume this value is the present value of the annuity. Also assume the discount rate is 4.007% (this is pretty close to what they actually use). What is the amount of the first payment that you will receive immediately if you choose the annuity option?

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