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Gabrielle just won $3 million in the state lottery. She is given the option of receiving...

Question:

Gabrielle just won $3 million in the state lottery. She is given the option of receiving a of $1,400,000 now, or she can elec

Gabrielle just won $3 million in the state lottery. She is given the option of receiving a of $1,400,000 now, or she can elect to receive $120,000 at the end of each of the next 25 years. If Gabrielle can earn 6% annually on her investments, which option should she take? If Gabrielle takes the prize as an annuity, the present value of the 25-year ordinary annuity is $ (Round to the nearest dollar.)

Answers

Hi

Let me know in case you face any issue:

Answer is highlighted in yellow: Solution: Using excel formula: PV(rate,nper,pmt,fv) FV (Future value) 0 pmt (Annuity) -12000

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