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 $2 million now.5 y+ S5 t& S! }. L% N
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.0 |1 x7 E5 s& g! T# U: | I* d
Assume the following:% J" S$ \! g' u9 J* `
- r = 0.06 (6 percent)7 B( s$ A) s3 {1 e& V
- Interest is paid annually to the Lottery Corporation