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The winner of a lottery is awarded $2,000,000 to be paid in annual installments of $100,000 for 20 years. Alternatively, the winner can accept a "cash value" one-time payment of $900,000. The winner estimates he can earn 8% annually on the winnings. What is the present value of the installment plan? (Round your answer to two decimal places.) $ Should he choose the one-time payment instead? O Yes, he should choose the one-time payment. O No, he should not choose the one-time payment

The winner of a lottery is awarded $2,000,000 to be paid in annual installments of $100,000 for 20 years. Alternatively, the winner can accept a "cash value" one-time payment of $900,000. The winner estimates he can earn 8% annually on the winnings. What is the present value of the installment plan? (Round your answer to two decimal places.) $ Should he choose the one-time payment instead? O Yes, he should choose the one-time payment. O No, he should not choose the one-time payment

Calculus: Early Transcendentals
Calculus: Early Transcendentals
8th Edition
ISBN:9781285741550
Author:James Stewart
Publisher:James Stewart
Chapter1: Functions And Models
Section: Chapter Questions
Problem 1RCC: (a) What is a function? What are its domain and range? (b) What is the graph of a function? (c) How...
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The winner of a lottery is awarded $2,000,000 to be paid in annual installments of $100,000 for 20 years. Alternatively, the winner can accept a "cash value" one-time payment of $900,000. The winner estimates he can earn 8% annually on the winnings. What is the present value of the installment plan? (Round your answer to two decimal places.) $ Should he choose the one-time payment instead? O Yes, he should choose the one-time payment. O No, he should not choose the one-time payment
Transcribed Image Text:The winner of a lottery is awarded $2,000,000 to be paid in annual installments of $100,000 for 20 years. Alternatively, the winner can accept a "cash value" one-time payment of $900,000. The winner estimates he can earn 8% annually on the winnings. What is the present value of the installment plan? (Round your answer to two decimal places.) $ Should he choose the one-time payment instead? O Yes, he should choose the one-time payment. O No, he should not choose the one-time payment
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