Your Friend Just Won the Lottery

question 26

Multiple Choice

Your friend just won the lottery.He has a choice of receiving $50,000 a year for the next 20 years or a lump sum today.The lottery uses a 15% discount rate.What would be the lump sum amount your friend would receive?

• A)$312,967
• B)$316,426
• C)$500,000
• D)$1,000,000

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Definitions:

Critical-Thinking Guidelines

Principles or strategies designed to promote reasoned analysis, evaluation, and synthesis of information to guide beliefs or actions.

Define Your Terms

A principle emphasizing the importance of clearly defining the words or concepts one is using in an argument or discussion.

Gut Reaction

An instinctive response or feeling, not based on rational thought.

Psychics

Individuals who claim to have abilities to perceive information hidden from the normal senses through extrasensory perception.