Short Answer
You win a lottery that pays $5,000 per month for 20 years, starting today. You have the option of taking a lump sum today instead of the monthly payments. The lottery people tell you that, if you take the monthly payments, the money you won is expected to earn 7.25% APR, compounded monthly, for the entire 20 years it will be invested. Given these data, what is the lump sum you would expect to receive today?
Correct Answer:
Verified
Correct Answer:
Verified
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