Won 100 million dollars in a lottery that pays installments

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Won 100 million dollars in a lottery that pays installments of 20 million dollars a year for five years or a lump sum of less than 100 million dollars. If I take the installments, my first installment would come the day I claimed my winnings at the state lottery office. If I take the lump sum, I would receive that payment the day I claimed my winnings at the state lottery office. Assume that the interest rate is 5% per year. Calculate what lump sum should be so it would equal the stream of installments. show and explain work to be given credit.

How would your answer change if the first installment did not come until one year after claimed my winnings

Reference no: EM13881679

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