SOLUTION: E5-3 Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a total of $1.3 million now, or she can elect to be paid $100,000 at the end of each

Question 607347: E5-3 Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a total of $1.3 million now, or she can elect to be paid $100,000 at the end of each of the next 25 years. If Gabrielle can earn 5% annually on her investments, from a strict economic point of view which option should she take?
Answer by richwmiller(17219) (Show Source): You can put this solution on YOUR website!
Take the 100,000 dollars. She will pay less tax and the total will be 2.5 million plus she will have interest of 1/2 million dollars.

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