you just won the florida lottery. you have the choice of 24000000 today or a 20

Question

you just won the florida lottery. you have the choice of 24000000 today or a 20 year annuity 2280000, with the first payment coming one year from today. If you want an annual return of 7.5 percent, should you take the lump sum or the annuity? Explain why . you just won the florida lottery. you have the choice of 24000000 today or a 20 year annuity 2280000, with the first payment coming one year from today. If you want an annual return of 7.5 percent, should you take the lump sum or the annuity? Explain why .

Explanation / Answer

SOLUTION:

At lump sum payment,

PVA = C [(1

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