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Find what rate of return is built into the annuity

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Problem 1: Suppose you just won the state lottery, and you have a choice between receiving $3,550,000 today or a 20-year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.

Select the correct answer.

a. 3.31%
b. 3.71%
c. 3.91%
d. 3.51%
e. 3.11%

Reference no: EM132752564

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