Jane has just won a lottery with a reported prize of $40M. However, this reported...
50.1K
Verified Solution
Link Copied!
Question
Finance
Jane has just won a lottery with a reported prize of $40M. However, this reported prize is just the sum of the 20 beginning-of-the-year payments of $2,000,000 per year, and this particular lottery doesnt offer an upfront cash option. This presents a problem for Jane because she wants to use her lottery winnings to fund her dream to build a Wildebeest Sanctuary right away and she would need more than the initial $2,000,000 lottery prize payment. Jane decides to put her entire lottery prize annuity up for bid. Several insurance and finance companies respond, and Prairie Insurance Company has the highest bid of $27M, which is accepted by Jane. What annual rate of return would the company earn with their bid?
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.