1) Gabrielle just won ?$22 million in the state lottery. She is given the option of receiving a total of $1,000,000 now, or she can elect to be paid $100,000 at the end of each of the next 20 years. If Gabrielle can earn 8% annually on her? investments from a strict economic point of view which option should she? take?
If Gabrielle takes the prize as an? annuity, the present value of the 20 year ordinary annuity is?
2) You can deposit $11,000 into an account paying 7% annual interest either today or exactly 10 years from today. ow much better off will you be at the end of 35 years if you decide to make the initial deposit today rather than 10 years from today?
The future value at the end of 35 years if you deposit $11,000 at 7% today is?