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c4 q15 need help with all 5 parts Lottery. Your dreams of becoming rich have just come true. You have won the State of Tranquility's
c4 q15 need help with all 5 parts
Lottery. Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the $3,000,000 advertised jackpot. You can take annual payments of $150,000 at the end of the year for the next 20 years or $1,120,417 today. a. If your investment rate over the next 20 years is 14%, which payoff will you choose? b. If your investment rate over the next 20 years is 11%, which payoff will you choose? c. At what investment rate will the annuity stream of $150,000 be the same as the lump-sum payment of $1,120,417? a. If your investment rate over the next 20 years is 14%, what is the present value of the $150,000 annual payments today? $ (Round to the nearest dollar.)Step by Step Solution
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