You just won the state lottery. the state gives yo the choice of $1 million today or a 20 year annuity of $75,000 starting one yer from today (assume both are after taxes). what rate of return is built into he annuity
2007-12-24 07:04:24 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
equation usd?
2007-12-24 07:17:11 · update #1
equation used?
2007-12-24 07:17:23 · update #2
Doing your homework on Christmas Eve...and asking others for the answers? It may be coal for you tomorrow.
Seriously though, why not follow the example in the textbook and see if it matches the other answer. If it doesn't, post your computations so we can critique your answer. It won't do you any good at test time if you don't know how to do it.
2007-12-24 07:36:24 · answer #1 · answered by taxreff 7 · 1⤊ 0⤋
The rate is 4.21 percent compounded annually. You are better off taking the $1 million because that amount can be invested better than 4.2 percent. A solid conservative stock portfolio can easily return 8-10 percent per year.
2007-12-24 07:15:32 · answer #2 · answered by Anonymous · 0⤊ 0⤋
that's a tricky question...
2016-08-26 13:45:02 · answer #3 · answered by ? 4 · 0⤊ 0⤋