What is the present value of the annuity stream option

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Another nice gentleman emails you to inform you that you have won an international lottery. Although the winnings are typically paid out in British Pounds, the man advises you the government will convert the funds to US Dollars and pay the wire transfer fees, all at no cost to you. After the disappointment of how much you would need to save each month in to achieve your original dream, you feel like your luck has turned back around. You now just have to decide if you would like your winnings paid out in a lump sum of $500,000 or receive annual end of year payments of $33,000 for 20 years. Assuming again that your money can earn 3% a year, what is the present value of the annuity stream option? (round to the nearest dollar)

Reference no: EM132468009

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