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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 $2 million now./ b7 P7 M( y# s+ A
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.7 }# B8 z* M$ b, e9 E3 W
Assume the following:
$ O2 |! n4 E9 G) D5 M: Y& ~- r = 0.06 (6 percent)4 u9 C4 d- {- e/ ?
- Interest is paid annually to the Lottery Corporation |
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