Bill Swill decides to try his luck at Powerball where the projected winnings are $12,000,000. If he wins, he can choose the annuity option (to be paid over 20 years) or a lump sum settlement that he can invest at 8% interest. How much must the lump sum option be to make the lump sum option equal to the annuity option (rounded)?
Bill Swill decides to try his luck at Powerball where the projected winnings are $12,000,000. If he wins, he can choose the annuity option (to be paid over 20 years) or a lump sum settlement that he can invest at 8% interest. How much must the lump sum option be to make the lump sum option equal to the annuity option (rounded)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Bill Swill decides to try his luck at Powerball where the projected winnings are $12,000,000. If he wins, he can choose the annuity option (to be paid over 20 years) or a lump sum settlement that he can invest at 8% interest. How much must the lump sum option be to make the lump sum option equal to the annuity option (rounded)?
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