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Congratulations! You have won the Lottery For Life and are the proud winner of $1,000 per week for the rest of your life!! You have the option of accepting a cheque for $1000 per week until you die, or reach the age of 75, whichever comes sooner. Alternatively, you may accept a cash payout of $2 million now.
& C' V' q4 C. E! y1 }1 z3 Q; Ha) Calculate the amount of money that the Alberta Lottery Corporation must keep in the bank to be able to pay the weekly prize.; ]1 Z& T9 ^$ X4 ?" A8 Z; s6 d! E
Assume the following:
' Z4 A7 m1 H) B" H6 r, [- r = 0.06 (6 percent)
2 l4 c3 M8 k1 W% }# |5 G- Interest is paid annually to the Lottery Corporation |
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