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Advise laura on which option she should

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Reference no: EM132679137

1. Laura James just won the lottery of $2.5 million dollars. She is given two options to receive her winnings after tax deductions:

a) Take an annual payment for the next 10 years of $225,000; or

b) Take a lump sum three times. $1,000,000 up front, & $500,000 each at the end of year 5 & 10 respectively.

Requirement: Advise Laura on which option she should take based on your calculations using 5% interest rate.

Reference no: EM132679137

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