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The lottery found out you learned how to calculate annuities during your undergraduate degree, and is now offering an option: $10,000 per year, plus $1500

The lottery found out you learned how to calculate annuities during your undergraduate degree, and is now offering an option: $10,000 per year, plus $1500 each year starting in the second year, for 10 years.

  1. How much is this worth at present? Consider interest to be 2%.
  2. The lottery has come back with one final offer: $10000 at year 1, and 5% growth each following year, up to and including year 10. What is the present worth of this option? Interest is still 2%.

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