Mc Gregor has just won a prize in a game show with the winning prize worth RM30 million. However, he was given two options to receive those prizes: Ja. Option 1: Receive RM1 million for next 30 years beginning now. b. Option 2: Receive RM1.5 million each year from year 1 until 10" year, RM500,000 from 11 to 20 years and RM1 million from 21 until 30 years. Required : (i) Suggest which of the two is the better option and assuming the interest rate at 7 percent for the next 30 years. (Please show your work). (ii) If she is offered third options, which is to receive RM12 million one lumD Sum amount now. What is the rate of interest, that makes Mc Gregor indifferent to choose either option one or three (Show the Janswer to two decimal points)?
Mc Gregor has just won a prize in a game show with the winning prize worth RM30 million. However, he was given two options to receive those prizes: Ja. Option 1: Receive RM1 million for next 30 years beginning now. b. Option 2: Receive RM1.5 million each year from year 1 until 10" year, RM500,000 from 11 to 20 years and RM1 million from 21 until 30 years.
Required :
(i) Suggest which of the two is the better option and assuming the interest rate at 7 percent for the next 30 years. (Please show your work).
(ii) If she is offered third options, which is to receive RM12 million one lumD Sum amount now. What is the rate of interest, that makes Mc Gregor indifferent to choose either option one or three (Show the Janswer to two decimal points)?
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