You are the lucky winner of the $30 million state lottery. You can take your prize money either as (a) 30 payments of $1 million per year (starting in one year), or (b) $15 million paid today. If the interest rate is 5.5%, which option should you take? Select one: O O a. Option a, as it is equivalent to 15 333 101 $ b. Option a, as it is equivalent to 15 141 074 $ c. Option b d. Option a, as it is equivalent to 15 372 451 $

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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You are the lucky winner of the $30 million state lottery. You can take your prize money either as (a) 30 payments of
$1 million per year (starting in one year), or (b) $15 million paid today. If the interest rate is 5.5%, which option
should you take?
Select one:
a. Option a, as it is equivalent to 15 333 101 $
b. Option a, as it is equivalent to 15 141 074 $
c. Option b
d. Option a, as it is equivalent to 15 372 451 $
Transcribed Image Text:You are the lucky winner of the $30 million state lottery. You can take your prize money either as (a) 30 payments of $1 million per year (starting in one year), or (b) $15 million paid today. If the interest rate is 5.5%, which option should you take? Select one: a. Option a, as it is equivalent to 15 333 101 $ b. Option a, as it is equivalent to 15 141 074 $ c. Option b d. Option a, as it is equivalent to 15 372 451 $
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