Sounds like an easy question, but here are the scenarios:
You can have one of the three....
A) You've won a 1 million dollar lottery. You decide to get paid out via annuity. This means you get equal installments for 20 years. The total of all years equals 1 million dollars minus taxes. You don't work for money.
B) You've won a 1 million dollar lottery. You decide to take your payout as a lump sum distribution. This means you roughly get half the money immediately. You're smart, you want the money to last. You invest it and get 8% annual return. You don't work for money.
C) You land a job that pays you 50,000 a year and are confident you will get 5% raises annually. You don't play the lottery.
Assuming you live 20 years following each scenario, which one are you financially better off with? Which option would you personally prefer? Why?
2007-05-14
08:11:20
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13 answers
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asked by
Zeltar
6