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

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    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 October 10, 2019, 6:36 am ad1c9bdddf
    https://brainmass.com/business/discounted-cash-flows-model/lottery-annuity-or-lump-sum-which-is-better-option-550046

    Solution Summary

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

    $2.19