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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.# W) s6 [* k6 V7 }1 H6 l# o: N
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.9 J3 A) }& N; W" B( ^ I2 L, g
Assume the following:
+ z) H! ?# \( K+ i3 z- x" H- r = 0.06 (6 percent): I$ y" j, }. x
- Interest is paid annually to the Lottery Corporation |
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