Explore BrainMass

Explore BrainMass

    Lumpsum or Annuity Option

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I need help determining which option would be the best choice.

    You have won a lottery and are given a choice on how to collect your winning. You can choice $1,000,000 lump sum or you can choose $80,000 ordinary annuity for the next 30 years. If you earn an interest rate of 8% on your funds, which of the two options should you choose?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:49 pm ad1c9bdddf
    https://brainmass.com/business/annuity/lumpsum-annuity-option-301120

    Solution Summary

    This solution helps go through choosing whether a lumpsum or annuity option is the better choice within the given scenario.

    $2.19

    ADVERTISEMENT