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1. Suppose you just won the state lottery, and you have a choicebetween receiving $2,550,000 today or a 20-year annuity of$250,000, with the first payment coming one year from today. Whatrate of return is built into the annuity? Disregard taxes.2. Your girlfriend just won the Florida lottery. She has thechoice of $15,000,000 today or a 20-year annuity of $1,050,000,with the first payment coming one year from today. What rate ofreturn is built into the annuity?3. How much would $100, growing at 5% per year, be worth after75 years?
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