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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.& F2 Q" N" W* g. g- i
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.5 D, x4 l; P1 `' g/ |
Assume the following:
+ L t8 D* n" f& O' Y, N9 r0 a- r = 0.06 (6 percent)
j8 {1 M) h! ?( l0 @3 X/ I' L- Interest is paid annually to the Lottery Corporation |
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