The winner of a state lottery will receive $30,000 a month for the rest of his/her...

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The winner of a state lottery will receive $30,000 a month for the rest of his/her life. Suppose the person who wins is 30 years old and has a life expectancy of 80 years. The monthly payments will be placed in a savings account that earns 0.25% per month (3% nominal interest per year, compounded monthly). If these payments are deposited into U.S. Treasury bonds, how much will the account be worth at age 80? (4.15) The winner of a state lottery will receive $30,000 a month for the rest of his/her life. Suppose the person who wins is 30 years old and has a life expectancy of 80 years. The monthly payments will be placed in a savings account that earns 0.25% per month (3% nominal interest per year, compounded monthly). If these payments are deposited into U.S. Treasury bonds, how much will the account be worth at age 80? (4.15)

Answer rating: 100% (QA)

To solve this problem we will use the formula for the future value of an annuity due to calculate th... View the full answer