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1.JG Wentworth has some well-known commercials.They will convert a stream of promised payments into cash today.That name is an example.Suppose that you won a lottery prize, so the promised payments are guaranteed by a government, the payments promised are $10,000 at the end of each of the next 10 years.

A).What dollar amount is the stream of payments worth to you if the interest rate is the9^th digit of your phone number?If the 9^th digit of your phone number is a 0 use the first non-zero digitproceeding your 9'th zero digit.For example if my phone number is 410-837-4987 my 9^th digit is 8 and my interest rate is 8%.If my phone number is 410-837-5003, use 5.If this is too complex, or you don't want to do it use a deck of cards and use the number obtained from a random draw or roll a dice and use the digit from that.

B.If you anticipate inflation to rise over the next 10 years does your choice of interest rate change? The "risk" out of the streams of payment have been minimized with the government guarantee so focus on expected inflation being above or below your nominal rate of interest chosen and why that I important.