In Exercises 27-32, find the present value of each annuity. Assume that all rates are annual rates. The value of a lottery prize Belinda was won a $ 3 , 400 , 000 lottery. She can take her prize as either 20 yearly payments of $ 1 , 500 $ 170 , 000 , 000 or a lump sum of $ 1 , 500 , 000 . Which is the better option? Assume an interest rate of 10 % .
In Exercises 27-32, find the present value of each annuity. Assume that all rates are annual rates. The value of a lottery prize Belinda was won a $ 3 , 400 , 000 lottery. She can take her prize as either 20 yearly payments of $ 1 , 500 $ 170 , 000 , 000 or a lump sum of $ 1 , 500 , 000 . Which is the better option? Assume an interest rate of 10 % .
Solution Summary: The author calculates the present value of each annuity by solving P in the equation rm by dividing r and 12.
In Exercises 27-32, find the present value of each annuity. Assume that all rates are annual rates.
The value of a lottery prize Belinda was won a
$
3
,
400
,
000
lottery. She can take her prize as either 20 yearly payments of
$
1
,
500
$
170
,
000
,
000
or a lump sum of
$
1
,
500
,
000
. Which is the better option? Assume an interest rate of
10
%
.
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