Jessie Won a Lottery and Was Given the Following Choice

question 68

Multiple Choice

Jessie won a lottery and was given the following choice.He could either take $5000 at the end of each month for 25 years,or a lump sum of $700 000.Assuming annual compounding at approximately what interest rate would he would be indifferent between the two choices?

• A)12.3
• B)6)7
• C)7)0
• D)7)3

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Definitions:

Contract

A contract is a legally binding agreement between two or more parties that outlines obligations and benefits for the parties involved.

Remedy

Legal means or measures available to a party to enforce a right or redress a harm.

Misrepresentation

The act of providing false or misleading information about a material fact, intentionally or negligently, causing someone to enter into a contract.

Affirmed

Officially confirmed or validated.