You Have a Choice Between a Lottery Lump Sum Payout

question 88

Multiple Choice

You have a choice between a lottery lump sum payout of $3,800,000 today or a series of twenty annual annuity due payments.At a discount rate of 6.00%,how large must the annual annuity due payments be to make you indifferent between the two choices? Use a calculator to determine your answer.

• A)$331,301.32
• B)$351,179.40
• C)$190,000.00
• D)$312,548.41

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Definitions:

Unsettled Conflicts

Issues or disagreements that have not been resolved, potentially leading to ongoing tension or stress.

Organic Inferiority

A concept introduced by psychologist Alfred Adler, referring to the perceived or actual physical weaknesses that can lead to feelings of inadequacy and compensatory striving for superiority.

Depressive Complex

A constellation of feelings, thoughts, and behaviors characterized by sadness, low self-esteem, and a lack of interest or pleasure in activities.

Superiority Complex

A psychological defense mechanism in which a person's feelings of superiority mask their true feelings of inferiority or weakness.