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Congratulations! You have won the Lottery For Life and are the proud winner of $1,000 per week for the rest of your life!! You have the option of accepting a cheque for $1000 per week until you die, or reach the age of 75, whichever comes sooner. Alternatively, you may accept a cash payout of $2 million now.( G5 N& X, J( X) }% x% _+ {
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.
8 e. m0 W! {* n+ j8 bAssume the following:
9 p2 ? e- G& X* G+ P5 n- r = 0.06 (6 percent)
0 l/ ]1 P# o$ H- Interest is paid annually to the Lottery Corporation |
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