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In a recent large PowerBall lottery, the prize was reported to be worth $590 million, which could be taken in 25 equal annual installments of

In a recent large PowerBall lottery, the prize was reported to be worth $590 million, which could be taken in 25 equal annual installments of $23.6 million beginning today or as a single payment today of $334 million.

a) What interest rate is the lottery commsion using?

b) How would you decide whether to take the 25 year annuity or the lump sum?

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