Should you take the lump sum or opt for the yearly payments

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Reference no: EM132055719

This week's Mega Millions jackpot is $60 million and you hold the only winning ticket. You are given the option of taking a one-time lump sum payment of $15 million or receiving annuity payments of $1 million per year for 50 years with an additional lump sum payment of $10 million dollars after 50 years. The appropriate discount rate is 8%. Should you take the lump sum or opt for the yearly payments?

a. Lump sum

b. Yearly payments

Reference no: EM132055719

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