SOLUTION: 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 t

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Question 651664: 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 Edwin McCravy(20060) About Me  (Show Source):
You can put this solution on YOUR website!
If Gabriel is 90 years old, she should take the $1.3 million now. If she is 30,
she should take the $100000 annually, because they will be taxed as long-term income.