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You have recently won the $200,000,000 Powerball lottery and are given the choice between two...

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Finance

You have recently won the $200,000,000 Powerball lottery and are given the choice between two different payout schemes. The first is to be paid $10,000,000 per year for the next 20 years or you can receive a lump sum payment today of $95,000,000. You have determined that if you invested funds today in long-term treasury bonds you would receive an annual rate of return of 3.2%. You also assume that you could invest today in an S&P 500 ETF that has an annual expected rate of return of 9.8%. What should you do? Explain your answer?

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