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3)Congratulations! You have just won a $40 million lottery and have elected to receive $2 million per year for 20 years. Assume that a 4

3)Congratulations! You have just won a $40 million lottery and have elected to receive $2 million per year for 20 years. Assume that a 4 percent interest rate is udes to evaluate the annuity and that you received each payment at the beginning of the year.

a) what is the present value of the lottery?

b) how much interest is earned on the present value to make the 2 million per year payment?

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