Mega Millions Winner!

Quantitative Finance Level 3

If you win a Mega Millions Jackpot of $500 million, you can either take a lump-sum payment of $360 million, or take an annual payout of $19 million a year over 26 years. In both cases, you will receive a payment today.

What discount rate (in %) would make you indifferent between these two payment options?

Ignore taxation rates.

Image credit: Flickr msspider66

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