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State to finance expenses from the recession

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The State operates a million dollar lottery that pays its winner 20 equal annual payments. The interest rate to finance this lottery has been 4%. How many $1 tickets must be sold for the lottery to break even (ignoring operating expenses)? The current interest rate to finance the lottery is 1% or lower because of the economy. Do you think expanding the lottery to a billion dollars with 40 annual payments would be a good method for the state to finance expenses from the recession?

Reference no: EM132498123

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