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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 $2 million now., W( K; { o( }
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.
, K3 q, Q( {, Y% c" XAssume the following:; S' k$ l! R( `' W0 P3 T
- r = 0.06 (6 percent)
1 j& @% Z+ V( P0 U. Q* p. g6 M1 c- Interest is paid annually to the Lottery Corporation |
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