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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.4 ]2 L0 Y+ z9 u
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.* q! q( Q3 I6 ]2 L. R8 A
Assume the following:
( ]8 \4 M# ^/ i9 q- r = 0.06 (6 percent)
# @( Z, ]) j, ~: V( E- Interest is paid annually to the Lottery Corporation |
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