1. Suppose you just won the state lottery, and you have a choice between receiving $2,550,000...

1. Suppose you just won the state lottery, and you have a choice between receiving $2,550,000 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.

2. Your girlfriend just won the Florida lottery. She has the choice of $15,000,000 today or a 20-year annuity of $1,050,000, with the first payment coming one year from today. What rate of return is built into the annuity?

3. How much would $100, growing at 5% per year, be worth after 75 years?

Expert Solution

The formulas and the inputs used is as follows:

The result is as follows:

jeff jeffy answered 11 months ago

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