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Using Present ValueYou win the lottery and are given the choice to receive a one-time lump-sum ...

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Using Present ValueYou win the lottery and are given the choice to receive a one-time lump-sum ...

Using Present Value

You win the lottery and are given the choice to receive a one-time lump-sum payment of $11.25 million now or 5 annual payments of $2.25 million starting today. Assume the interest rate is equal to 2.75%, what is the present value of the annual payments? Which option results in the highest payout? Please round your answer to two decimal places.

▸ $10.66 million, 5 annual payments

▸ $8.41 million, 5 annual payments

▸ $10.66 million, lump-sum payment

▸ $8.41 million, lump-sum payment

Textbook

Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

Read 37 times

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edehghany Author

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I appreciate what you did here, answered it right Smiling Face with Open Mouth

aricketts6@

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Thank you, thank you, thank you!

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Thanks

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