Explore BrainMass

Explore BrainMass

    Lottery: Annuity or lump sum? which is better option?

    Not what you're looking for? Search our solutions OR ask your own Custom question.

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

    Assume you won the lottery for $7M. You have the following two choices in how you want to receive your prize:
    1. $350,000 each year for the next 20 years, with the first check received today
    2. One lump sum of $4M in cash today.

    Which is the better option?

    © BrainMass Inc. brainmass.com November 24, 2021, 5:32 pm ad1c9bdddf

    Solution Summary

    Your tutorial is attached and explains how the rate changes the decision.