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    irishgal424's Avatar
    irishgal424 Posts: 1, Reputation: 1
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    #1

    Oct 26, 2010, 06:38 AM
    Suppose you just won the lottery and you have a choice between receiving a 20-year
    Annuity of $250,000 or $2,550,000 today, with the first payment coming one year from today. What rate of return is built into the annuity? Which one would you choose and why? Disregard taxes.
    smoothy's Avatar
    smoothy Posts: 25,492, Reputation: 2853
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    #2

    Oct 26, 2010, 06:41 AM

    Not considering return... if you took an annuity and died next year... the money stops. If you take a cash payment its yours and your heirs would get it in your estate.
    smoothy's Avatar
    smoothy Posts: 25,492, Reputation: 2853
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    #3

    Oct 26, 2010, 07:45 AM
    Quote Originally Posted by ;
    irishgal424 does not find this helpful : I need help with the calculations before deciding which option to take
    Try reading the site rules pertaining to comments...

    There was NOTHING factually incorrect with what I told you.

    In fact.. YOU made a factually incorrect statement by failing to say this was a homework question you wanted us to answer for you in your post. And THIS isn't the homework forum.
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