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You just won 35 million in the florida lottery the state

You just won $35 million in the Florida lottery. The State will pay you over 20 years of $1.75 million each year beginning immediately.

a. What is the implied interest rate of the lottery winnings?

b. Assuming a discount rate of 6%, what is the present value of your lottery winnings?

c. What would you rather have - $35 million over 20 years, or the present value now?

d. What if the opportunity cost was 10%. Is your answer the same? Why?

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Finance Basics: You just won 35 million in the florida lottery the state

Reference No:- TGS02517150

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