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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 $2 million now.1 Y# q5 \6 C4 `( x( W$ |( ]
a) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.
8 f2 I1 ?6 f( K9 ~) b& CAssume the following:
( J2 a; V- w% R1 D% a4 W& b- r = 0.06 (6 percent)
$ @: n0 B, N0 u5 F3 `! ~- Interest is paid annually to the Lottery Corporation |
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