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JUDULIUDUCULO 1 Normal 1 No Spac... Heading 1 Heading 2 Title Paragraph The Lottery Question Styles 1. Congratulations: you have won the lottery and you
JUDULIUDUCULO 1 Normal 1 No Spac... Heading 1 Heading 2 Title Paragraph The Lottery Question Styles 1. Congratulations: you have won the lottery and you have several decisions to make but you need information to make the correct decision. The advertised value is a total value $500,000,000 payable equally over 20 years. Lotteries that are paid over a fixed time period are generally contracted as an annuity purchased with an insurance company. A. Another option for the payout is to take a lump sum payment. If the lump sum payout is $220,526,250, what is the interest rate being used for the lottery? B. Assuming you could invest the lump sum payout in the following manor: a. Year 1 thru 5 at 5% b. Year 6 thru 10 at 10% C. Year 11 thru 15 at 15% d. Year 16 thru 20 at 7%
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