Michael has just won some money on a game show! He has the option to take a lump sum payment of $700,000 now or get paid an annu

Question

3 years ago

15

Michael has just won some money on a game show! He has the option to take a lump sum payment of $700,000 now or get paid an annu

ity of $3,600 at
the beginning of each month for the next 20 years. Assuming the growth rate of the economy is 3.4% compounding annually over the next 20 years, which
is the better deal for Michael and by how much? (4 points)

Mathematics

1 answer:

Maslowich · Answer 1 · 2022-07-26T12:32:51+03:00

Maslowich3 years ago

6 0

Answer:

Answer is B, the nominal rate is 3% and the interest rate is 1%

Step-by-step explanation: