Lotta Dough Just Won the State Lottery and Has Elected

question 16

Multiple Choice

Lotta Dough just won the state lottery and has elected to receive $50,000 per year for 20 years in the form of an annuity due.What is the present value of this stream of payments if money can earn 10 percent annual interest?

• A)$864,642
• B)$468,246
• C)$246,468
• D)$500,000

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Definitions:

Cognitive Learning

Learning based upon mental processes, such as thinking, memory, understanding, and reasoning, rather than by emotional or instinctual responses.

Classical Conditioning

The development of understanding through the combination of a naturally present stimulus and one from the environment.

Adaptability

The ability to change or be changed to fit varied circumstances or environments, often essential for survival, growth, and development.

Learning

The act of gaining new insights, learning, abilities, values, or inclinations by means of education, practical exposure, or instruction.