Assume I won the 100 million dollars in a lottery that paid installments of 20 million dollars a year for five payments or a lump sum payment. I would get the first installment payment on the day I won the lottery and installments to follow for the next four years. Or I could take the lump sum payment the day I won the lottery. What is the maximum lump sum payment the state should offer me? Show your work and explain you answer. Assume the current interest rate is 5% per year.© BrainMass Inc. brainmass.com October 10, 2019, 12:14 am ad1c9bdddf
Here periodic payment is made at the beginning of period. Maximum lump sum amount will be equal to ...
The solution describes the steps to calculate maximum lump sum amount for future payments.