You have just won the lotto, you have two options, you can receive ten, 500,000 dollars semiannual payments starting today, or you can take your winning in a lump-sum payment now based on 7% annual interest rate. Determine the equivalent lump-sum payment?
Hi, im really having a hard time trying to solve this problem. I believe the first options is a annuity due, since the payments are starting today, but what really confuses me is the ten semiannual payments. Also the second option do i just take the 500,000 dollars with the ten payments and 7% interest and just figure out the present value of a dollar?
Hi, im really having a hard time trying to solve this problem. I believe the first options is a annuity due, since the payments are starting today, but what really confuses me is the ten semiannual payments. Also the second option do i just take the 500,000 dollars with the ten payments and 7% interest and just figure out the present value of a dollar?