Sandra Won $5,000,000 in the State Lottery,which She Has Elected

question 35

Multiple Choice

Sandra won $5,000,000 in the state lottery,which she has elected to receive at the end of each month over the next thirty years.She will receive 7% interest on unpaid amounts.To determine the amount of her monthly check,she should use a table for the:

• A)Future value of $1.
• B)Present value of $1.
• C)Future value of an annuity of $1.
• D)Present value of an annuity of $1.

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Definitions:

Faulty Heuristics

Cognitive shortcuts that lead to errors in judgment or decision-making.

Heuristics

Simple, efficient rules, often learned or instinctive, that help in making decisions, forming judgments, or solving problems.

Behavioral Economists

Economists who study how psychological, social, cognitive, and emotional factors affect economic decisions of individuals and institutions.

Rational Calculations

The process of making decisions based on logical reasoning and quantitative analysis to achieve the most favorable outcome.