Question
If no other specification is made, assume the annuity is an ordinary annuity (with deposits/payments made at the end of each compounding period). Monte won
If no other specification is made, assume the annuity is an ordinary annuity (with deposits/payments made at the end of each compounding period).
Monte won the big $5 million prize on the TV show "Go Big or Go Home." But, the small print states that she doesn't get this amount of money as a lump sum payment. Instead, she can choose to take a lump sum payment or she can accept annual payments over 10 years. The lump sum payment will be calculated by the TV producers as a present value, as if it were a 10-year annuity at 3.6% interest compounded annually.
(A) What is the lump sum payment of Monte's game winnings? (Round your answer to the nearest cent.)
$______________
(B) What will her winnings from the TV game show be if she accepts annual payments for 10 years?
$_______________
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