The following screenshot from the Missouri Lottery website estimates a $26 million prize for the July 2, 2022 drawing. The $26 million is to be paid as an annuity due with 30 annual payments. What 's different than in our notes is that Powerball payments increase by 5% each year. For a 1% interest rate, how would this increasing annuity amount affect the setup in a spreadsheet and in the Present Value of Annuity Due formula? All these considered, would you take the annuity or the $15.1 million lump sum?
The following screenshot from the Missouri Lottery website estimates a $26 million prize for the July 2, 2022 drawing. The $26 million is to be paid as an annuity due with 30 annual payments. What 's different than in our notes is that Powerball payments increase by 5% each year. For a 1% interest rate, how would this increasing annuity amount affect the setup in a spreadsheet and in the Present Value of Annuity Due formula? All these considered, would you take the annuity or the $15.1 million lump sum?
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
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Transcribed Image Text:The following screenshot from the Missouri Lottery website estimates a $26 million prize for the July 2, 2022 drawing. The $26 million is to be paid as an annuity due with 30 annual payments. What
's different than in our notes is that Powerball payments increase by 5% each year.
For a 1% interest rate, how would this increasing annuity amount affect the setup in a spreadsheet and in the Present Value of Annuity Due formula?
All these considered, would you take the annuity or the $15.1 million lump sum?
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