Multiple Choice
The solution to this problem requires time value of money calculations. Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Winston wins the lottery. He wins $20,000 per year to be paid to him for 10 years. The state offers him the choice of a cash settlement now instead of the annual payments for 10 years. If the interest rate is 6%, what is the amount the state will offer for a settlement today?
A) $147,200
B) $200,000
C) $154,440
D) $175,000
Correct Answer:
Verified
Correct Answer:
Verified
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