Lotta Dough Just Won the State Lottery and Has Elected

question 5

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 7 percent annual interest?

• A)$500,000
• B)$977,665
• C)$779,664
• D)$566,780

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Definitions:

Parasympathetic Nervous System

A division of the autonomic nervous system responsible for conserving energy and slowing down the heart rate, among other functions.

Digestion

The process by which the body breaks down food into small nutrient molecules that can be absorbed and utilized.

Rest Activities

Activities designed to provide relaxation and recuperation from physical or mental exertion.

Fight or Flight

A physiological response to perceived harmful events, attacks, or threats to survival, preparing the body to either confront or avoid the danger.