A winner of the state lottery was given two choices: receive a single lump sum payment now of $50 million or receive 21 uniform payments, with the first payment to be made now, and the rest to be made at the end of each of the next 20 years. At an interest rate of 4% per year, the amount ofthe 21 uniform payments that would be equivalent to the $50 million lump-sum payment is closest to:a. $3,152,000b. $3,426,800c. $3,623,600d. $3,923,800
A winner of the state lottery was given two choices: receive a single lump sum payment now of $50 million or receive 21 uniform payments, with the first payment to be made now, and the rest to be made at the end of each of the next 20 years. At an interest rate of 4% per year, the amount ofthe 21 uniform payments that would be equivalent to the $50 million lump-sum payment is closest to:a. $3,152,000b. $3,426,800c. $3,623,600d. $3,923,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A winner of the state lottery was given two choices: receive a single lump sum payment now of $50 million or receive 21 uniform payments, with the first payment to be made now, and the rest to be made at the end of each of the next 20 years. At an interest rate of 4% per year, the amount of
the 21 uniform payments that would be equivalent to the $50 million lump-sum payment is closest to:
a. $3,152,000
b. $3,426,800
c. $3,623,600
d. $3,923,800
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