Question

mment 3 Factors Help Save & Els The winner of a multistate mega millions lottery jackpot worth $175 million was given the option of taking payments of $7 million per year for 25 years, beginning one year from now, or taking $109.355 million now. The interest rate that renders the two options equivalent to each other is closest to Multiple Choice 04% 0 0 O

Answer 1

answer is 4%

Here, we are given that A(PA,,n) = 109.355 => TIP/A, i, 25) = 109.355 =(C/A), 25) = 109.355 => [P/A, i, 25) 15-6221 For N-25 .f P/A - 15.6221, We can see from the end of compound interest table that interest rate is equal to 4% Thus, option (4) 44% is cosmeet. ክ በ በ በ በ ዘ ዘ ዘ ዘ ዘ ዘ period