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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.% h* A8 P. _/ j% J. ^" N+ L) B
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.
: ]( P; S+ a ?8 N6 K( MAssume the following:( S8 W% _4 U& e, U
- r = 0.06 (6 percent), D! B3 e- D/ T6 U- j: N V2 \, \
- Interest is paid annually to the Lottery Corporation |
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