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.: o* H k% N% S+ `3 K
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize. 8 m& k2 N* n9 f R6 u# {1 r- [Assume the following:/ A" {# H" S% R! M: s7 s7 ~
- r = 0.06 (6 percent) 4 H3 O& N+ e% j) U" o) _- Interest is paid annually to the Lottery Corporation