Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the$4,000,000 advertised jackpot. You can take annual payments of $160,000 at the end of the year for the next 25 years or $1,864,573 today. c. At what investment rate will the annuity stream of $160,000 be the same as the lump-sum payment of $1,864,573?
Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the$4,000,000 advertised jackpot. You can take annual payments of $160,000 at the end of the year for the next 25 years or $1,864,573 today. c. At what investment rate will the annuity stream of $160,000 be the same as the lump-sum payment of $1,864,573?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 6P
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Your dreams of becoming rich have just come true. You have won the State of Tranquility's Lottery. The State offers you two payment plans for the$4,000,000 advertised jackpot. You can take annual payments of $160,000 at the end of the year for the next 25 years or $1,864,573 today.
c. At what investment rate will the
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