Geraldo recently won a lottery and chose to receive $100,000 today instead of an equivalent amount in 10 years, computed using an 8 percent rate of return. today, he learned that interest rates are expected to increase in the future. use exhibit 3.1. is this good news for geraldo given his decision?

This is good news for Geraldo's choice. On the off chance that Geraldo deferred the $100,000 at a 8 percent interest rate, the expansion in loan fees would have lessened the present estimation of the lottery rewards. The proportionate sum in 10 years at 8 percent is roughly $216,000. In the event that this sum was discounted back to display an incentive at 10 percent (rather than 8 percent), the present esteem would be just about $83,000.

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