Question
The lump sum payment of a lottery is $124,100,000. Rather than receiving a lump sum payout, the winnings are paid in 30 annual payments. The
The lump sum payment of a lottery is $124,100,000. Rather than receiving a lump sum payout, the winnings are paid in 30 annual payments. The first payment of 6.5 million is made immediately. Payments increase by 4% per year, thereafter. Calculate the annual effective rate of return the lump sum must earn to generate these 30 annual payments.
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Microeconomics An Intuitive Approach with Calculus
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