Why the state lottery is not willing to give fred the full

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Question

Fred just won the state lottery and was given two options for receiving his money. He can take a single lump-sum payment of $21.7 million today or instead receive $1 million each year for 30 years (ultimately totaling $30 million). Briefly explain in general terms (no calculations required) why the state lottery is not willing to give Fred the full $30 million today, but is instead only offering him $21.7 million for the immediate lump-sum option.

Reference no: EM132386382

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