Want to win a million dollars? Heres how. . . . One winner, chosen at random from
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Question:
“Want to win a million dollars? Here’s how. . . . One winner, chosen at random from all entries, will win a $1,000,000 annuity.”
That was the statement announcing a contest on
the World Wide Web. The contest rules described the “million-dollar prize” in greater detail: “40 annual payments of $25,000 each, which will result in a total payment of $1,000,000. The first payment will be made January 1; subsequent payments will be
made each January thereafter.”
Q:Using a compound annual interest rate of 8 percent, what is the present value of this “million-dollar prize” as of the first installment on January 1?
Related Book For
Introduction to Probability
ISBN: 978-0716771098
1st edition
Authors: Mark Daniel Ward, Ellen Gundlach
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