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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 $2 million now.
) Q9 s, u9 k- `0 [# Z. i# U7 p& ja) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.
) K3 Q( O5 C4 ^9 H. B0 y* qAssume the following:; u$ v7 P0 H' j0 D$ d$ z
- r = 0.06 (6 percent)7 u& ] F4 @+ v9 p# y( s
- Interest is paid annually to the Lottery Corporation |
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