$3\mathrm{.}7$: Applications to Business

Score: $\frac{7\mathrm{.}5}{13},\frac{8}{13}$ answered

Question $13$

Lucky Larry wins $$5,000,000$ in a state lottery. The standard way in which the state pays such lottery winnings is at a constant rate of $$200,000$ per year for $25$ years. Round your answer to the nearest $$10.$

If Lucky invests each payment from the state at $6\%$ compounded continuously, what is the accumulated future value of the income stream?

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What is the accumulated present value of the income stream at $6\%,$ compounded continuously? $($This amount represents what the state has to invest at the start of its lottery payments, assuming the $6\%$ interest rate holds.$)$

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