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The local government is about to run a lottery but does not want to be involved in the payoff if a winner picks an annuity
The local government is about to run a lottery but does not want to be involved in the payoff if a winner picks an annuity payoff the government contracts with a trust to pay the lump sum payout to the trust and have the trust probably a local bank pay the annual payments the first winner of the lottery chooses the annuity and will receive $ a year for the next years the local government will give the trust $ million to pay for this annuity what investment rate must the trust earn to break even on this arrangement
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