Bab F12 F10 F11 Backspace Task 2: Some numeric calculations - SHOW WORKING [12 marks] Winners of large prizes are given the option of being paid their winnings as a lump sum or in Enter the form of an annuity. The lump sum is considerably less than the advertised winnings; the annuity consists of payments made annually, quarterly, monthly, or at some other regular interval until the advertised amount won is distributed. Shif 1. Jean won $1 000 000 in a lottery to be received in four annual payments of $250 000. pa . a) She will receive the first payment in exactly one year from now. What is the present value of the four payments if the interest rate is 4.2%? Did it cost the Lottery Commission $1 000 000 to pay Jean her prize money? Explain and find out how much it did cost the Lottery Commission. miny in [3] b) She will receive the first payment now and then at the beginning of the next 3 years. What is the present value of the four payments if the interest rate is 4.2%? What did it cost the Lottery Commission $1 000 000 to pay Jean her prize money? [2] c) Explain why the amounts in part 1a and 1b are different. [1]