# Calculate maximum lump sum amount for future payments

Not what you're looking for?

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.

##### Purchase this Solution

##### Solution Summary

The solution describes the steps to calculate maximum lump sum amount for future payments.

##### Solution Preview

Here periodic payment is made at the beginning of period. Maximum lump sum amount will be equal to ...

###### Education

- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India

###### Recent Feedback

- "Thank you"
- "Really great step by step solution"
- "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
- "Thanks Again! This is totally a great service!"
- "Thank you so much for your help!"

##### Purchase this Solution

##### Free BrainMass Quizzes

##### Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

##### Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

##### Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

##### Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

##### Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.