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A lottery prize is $600 million. If interest rate is 3 % nominal annual compounded annually, answer the following questions. (a) If the prize is to be paid out as an equal amount at the end of each year for the next 30 years, how much is paid every year? (b) If the prize is to be paid out at the end of each year beginning with $20 million at the end of the first year, and increasing by $10 million each year after that, how long will the payout last? Use linear interpolation.

A lottery prize is $600 million. If interest rate is 3 % nominal annual compounded annually, answer the following questions. (a) If the prize is to be paid out as an equal amount at the end of each year for the next 30 years, how much is paid every year? (b) If the prize is to be paid out at the end of each year beginning with $20 million at the end of the first year, and increasing by $10 million each year after that, how long will the payout last? Use linear interpolation.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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5. A lottery prize is $600 million. If interest rate is 3 % nominal annual compounded annually, answer the following questions. (a) If the prize is to be paid out as an equal amount at the end of each year for the next 30 years, how much is paid every year? (b) If the prize is to be paid out at the end of each year beginning with $20 million at the end of the first year, and increasing by $10 million each year after that, how long will the payout last? Use linear interpolation.
Transcribed Image Text:5. A lottery prize is $600 million. If interest rate is 3 % nominal annual compounded annually, answer the following questions. (a) If the prize is to be paid out as an equal amount at the end of each year for the next 30 years, how much is paid every year? (b) If the prize is to be paid out at the end of each year beginning with $20 million at the end of the first year, and increasing by $10 million each year after that, how long will the payout last? Use linear interpolation.
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