Business
Business, 13.12.2019 17:31, jonellelewis706

Value of an annuity versus a single amount personal finance problem assume that you just won the state lottery. your prize can be taken either in the form of $55 comma 000 at the end of each of the next 30 years (that is, $1 comma 650 comma 000 over 30 years) or as a single amount of $731 comma 000 paid immediately.

a. if you expect to earn 6% annually on your investments over the next 30 years, ignoring taxes and other considerations, which alternative should you take? why?
b. would your decision in part a change if you could earn 8% rather than 6% on your investments over the next 30 years? why?
c. at approximately what interest rate would you be indifferent between the two options?

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