Answered

Find answers to your most challenging questions with the help of IDNLearn.com's experts. Discover in-depth and trustworthy answers to all your questions from our experienced community members.

A lottery winner can take $6million now or be paid $600,000 at the end of each year for the next 16 years. The winner calculates the internal rate of return of taking the money at the end of each year, and estimating that the discount rate across this period will be 5%, decides to take the money at the end of each year. Was her decision correct

Sagot :

Answer:

yes

the present value of the 16 year annuity is 6502661.74. this is greater than $6 million

Explanation:

We are happy to have you as part of our community. Keep asking, answering, and sharing your insights. Together, we can create a valuable knowledge resource. Thank you for choosing IDNLearn.com for your queries. We’re here to provide accurate answers, so visit us again soon.