Explain mathematical calculation for the present value


You have just won the $50 million state lottery jackpot. You may take it as one lump sum or as 20 annual payments of $2.5 million. In the second situation, assume the discount rate is 7%. Write a summary paragraph detailing which way you want to receive the money and why, including the mathematical calculation for the present value of the $50 million taken in 20 annual payments.

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