"Winning the Jackpot!"
It’s probably one of the most fun ideas to think about - winningthe lottery! So, let’s have some fun. Suppose you win the Powerballwhen the jackpot is at $300,000,000. You are given the option of alump sum payment or an annuity. The lump sum means receiving theentire cash value at once, but the lump sum will be less than the$300,000,000. The annuity will be paid out in 30 payments over 29years, which increase by 5% each year to keep up with the cost ofliving.
- In light of the above scenario, would you take the lump sumpayout? Or would you take an annuity, and receive the payments overtime? Provide a rationale for your response.
