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:

Insulator

A material or object that does not easily allow heat, electricity, or sound to pass through it.

Collagen Fibers

Strong, fibrous proteins found in connective tissue, including skin, tendons, and ligaments, providing structural support and strength.

Extracellular Matrix

A complex network of proteins and carbohydrates surrounding cells, providing structural and biochemical support to tissues.

Gastrocnemius Muscle

A major calf muscle at the back of the lower leg, involved in walking, running, and jumping.