You Have Just Won the Lottery and Have Three Payout

question 138

Essay

You have just won the lottery and have three payout options:
1.$1,000,000 now
2.$150,000 at the end of each year for the next ten years
3.$2,000,000 at the end of ten years.
What is a common basis for comparison that you can use to decide which option to choose? Explain your answer.

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Definitions:

Egocentrism

The inability to distinguish between one's own perspective and someone else's perspective.

Habituation

A decline in the response to a stimulus once the stimulus has become familiar.

Habituation

The process by which an individual becomes accustomed to a stimulus after repeated exposure, leading to a decrease in response.

Heart-rate

The speed at which the heart beats, measured in beats per minute, which can indicate physical exertion, stress levels, or heart health.