John won a lottery that will pay him $500,000 at the end of each of the next

Question:

John won a lottery that will pay him $500,000 at the end of each of the next twenty years. Zebra Finance has offered to purchase the payment stream for $6,795,000. What interest rate (to the nearest percent) was used to determine the amount of the payment?
a. 7%
b. 6%
c. 4%
d. 5%
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Canadian Income Taxation Planning And Decision Making

ISBN: 9781259094330

17th Edition 2014-2015 Version

Authors: Joan Kitunen, William Buckwold

Question Posted: