The cash option amount is determined by discounting the


Present value. Winners of the Georgia lotto drawing are given the choice of receiving the winning amount divided equally over 20 year or as a lump-sum cash option amount. The cash option amount is determined by discounting the winning amount at 7% over 20 years. This week the lottery is worth $6 million to a single winner. What would the cash option payout be?

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Microeconomics: The cash option amount is determined by discounting the
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