You Won the Lottery and Have a Number of Choices

question 125

Multiple Choice

You won the lottery and have a number of choices as to how to take the money.Which choice yields a greater present value?

• A)$12,000 a year at the end of each of the next 6 years using a 6% discount rate
• B)$53,500 (lump sum)now using a 6% discount rate
• C)$84,000 (lump sum)7 years from now using a 6% discount rate
• D)$92,000 (lump sum)7 years from now using an 8% discount rate

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Definitions:

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Surrendering or yielding often after negotiation or when pressured.

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An individual's typical mode of expressing or managing their emotions, which can influence their behavior and interactions with others.

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