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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 $2 million now.: p7 c; T1 U `, f) t+ F( y
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.
3 U$ d) `/ f# a1 U) KAssume the following:
( X* ?' G% h" J, @1 {- r = 0.06 (6 percent)
8 u' q5 c U& ]+ A, ^- Interest is paid annually to the Lottery Corporation |
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