Question

You won the lottery when the advertised prize was $1,000,000. If you choose the "lump sum"...

You won the lottery when the advertised prize was $1,000,000. If you choose the "lump sum" option you will be paid $500,000 immediately. Instead, you choose to recieve ten annual payments in the amount of $100,000. What is the implied rate of return?

(Please provide formula to solve this problem, if an excel method exists that will work too).

The answer to this question is 15.10, but here were the answers given:
A. 13.22
B. 15.10
C. 16.78
D. 12.34
E. None of the above

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