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A state lottery gives a winner the choice of receiving the winning amount in equal monthly payments for 20 years or receiving a lump
A state lottery gives a winner the choice of receiving the winning amount in equal monthly payments for 20 years or receiving a lump sum equal to the present value of an annuity with future value equal to the winnings. The winner selecting monthly payments will receive $6,000,000/240 = $25,000.00 each month for each million dollars of winnings. (Round your final answers to two decimal places.) (a) Find the present value of an annuity with monthly payments of $25,000.00, at an interest rate of 5.7% for 20 years, for the winner who wants a lump-sum payment. $ 3575350.71 (b) In order for the lottery to be more profitable, it is decided to pay the winnings in equal monthly payments for 25 years. Find the monthly payments of $6 million in winnings. $ 37565.31 Find the present value of an annuity with those monthly payments at 5.7% for 25 years. $11269591.83
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