## Related questions with answers

Question

**(a) decide whether the problem relates to an ordinary annuity or an annuity due and then (b) solve the problem.**

A $\$ 2.4$ million state lottery pays $\$ 10,000$ at the beginning of each month for $20$ years. How much money must the state actually have on hand to set up the payments for this prize if money is worth $6.3 \%$ compounded monthly?

Solutions

VerifiedSolution A

Solution B

Answered 1 year ago

Step 1

1 of 10In this exercise, the task is to determine the present value of an annuity due considering the given input data.

Answered 1 year ago

Step 1

1 of 4**(a)**
Given that the state lottery pays at the beginning of each month for $20$ years, we can infer that this investment situation is an annuity due.

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