Computing the present and future value of the payments

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Reference no: EM131204936

Pretend for a moment that you won $1,000,000 in the state lottery and had a choice between receiving $50,000 a year for 20 years, or receiving a one-time payment immediately for $560,000. After getting over your initial excitement, what payment option would you take and why. In your decision, apply the time-value of money by computing the present and future value of the payments. Show your calculations. Finally, what other factors are important to consider in making your decision?

Reference no: EM131204936

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