You win the lottery. You can either have $850,000 right now, or $1,000,000 paid in annual installments

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You win the lottery. You can either have $850,000 right now, or $1,000,000 paid in annual installments of $200,000 starting next year. If the interest rate is 6%(0.06), which will you choose? Why? What if the interest rate is 4%(0.04)? Explain.

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Microeconomics An Intuitive Approach with Calculus

ISBN: 978-0538453257

1st edition

Authors: Thomas Nechyba

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Posted Date: Feb 16, 2024 03:13 AM

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You win the lottery. You can either have $850,000 right now, or $1,000,000 paid in annual installments

Question:

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ANSWER To determine which option is more advantageous lets analyze both scenarios Scenario 1 Interest Rate of 6 006 If the interest rate is 6 we need ... View the full answer

Microeconomics An Intuitive Approach with Calculus

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