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Congratulations! You have just won the North Dakota state lottery (such things are illegal here in Utah). You have been given the option of a
Congratulations! You have just won the North Dakota state lottery (such things are illegal here in Utah). You have been given the option of a lump-sum payout today or a series of annual payments over the next 25 years. If the lump-sum payout is $115 million and assuming an interest rate of 5%, what amount would the annual payment need to be for you to be indifferent between the two options?
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