Interest rate that both earnings are worth the same

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Reference no: EM131878339

Winning Lottery: Jake is the proud winner of the Powerball, lucky Jake! He decides instead of blowing the money, he wants to invest the winnings. Jake devises a plan to invest the lottery money at an annual rate of 5%

a. Would it be wise to accept the upfront payment of $250 million or should Jake take the annual value of $500 million paid over 20 years?

b. Is there an interest rate that both earnings are worth the same?

Reference no: EM131878339

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