A state lottery commission pays the winner of the Million Dollar lottery 40 installments of $25,000/year. The
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A state lottery commission pays the winner of the Million Dollar lottery 40 installments of $25,000/year. The commission makes the first payment of $25,000 immediately and the other n = 39 payments at the end of each of the next 39 years. Determine how much money the commission should have in the bank initially to guarantee the payments, assuming that the balance on deposit with the bank earns interest at the rate of 6%/year compounded yearly. Hint: Find the present value of the annuity. (Round your answer to the nearest cent)
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Related Book For 
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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