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

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abiolataiwo2015

Based on the information given cash option payout​ is $10,570,847.19.

Cash option payout

First step is to calculate the PMT

PMT =18,000,000/19

PMT=$947,368.42

Second step is to find the cash option payout using financial calculator by imputing the below value.

PMT= -$947,368.42

FV=$0

N=19 years

I/Y= 6%

PV=?

Hence,

CPT PV=$10,570,847.19

Inconclusion the cash option payout​ is $10,570,847.19.

Learn more about cash option payout​ here:https://brainly.com/question/15904086

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