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Suppose you just won the state lottery, and you have a choice between receiving $2,575,000 today or a 20-year annuity of $250,000, with the first

Suppose you just won the state lottery, and you have a choice between receiving $2,575,000 today or a 20-year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.

a. 7.13%

b. 7.37%

c. 7.44%

d. 4.74%

e. 6.41%

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