Suppose You Just Won the State Lottery, and You Have

question 23

Multiple Choice

Suppose you just won the state lottery, and you have a choice between receiving $2,550,000 today or a 20-year annuity of $250,000, with the first payment coming one year from today.What rate of return is built into the annuity? Disregard taxes.

• A) 7.12%
• B) 7.49%
• C) 7.87%
• D) 8.26%
• E) 8.67%

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Definitions:

Innovation

The process of translating an idea or invention into a good or service that creates value or for which customers will pay.

Feedback

Information provided as a response to an action or behavior, intended to guide future actions.

Tensions

The state of being stretched tight, often referring to mental or emotional strain resulting from challenging situations.

Obliging

Willingness to do a service or kindness; readily performing favors or good deeds.