Question
Congratulations! You have just won the lottery and have elected to receive $50,000 per year for 20 years. Assume that a 4 percent interest rate
Congratulations! You have just won the lottery and have elected to receive $50,000 per year for 20 years. Assume that a 4 percent interest rate is used to evaluate the annuity and that you receive each payment at the beginning of the year.
What is the present value of the lottery?
How much interest is earned on the present value to make the $50,000-per-year payment?
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Asset Allocation From Theory To Practice And Beyond
Authors: Mark P. Kritzman, William Kinlaw, David Turkington, Harry M. Markowitz
1st Edition
1119817714, 978-1119817710
