What rate of return is built into the annuity

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Reference no: EM13942930

Suppose you just won the state lottery, and you have a choice between receiving $2,075,000 today or a 15-year annuity of $300,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.

1. 13.26%

2. 10.38%

3. 12.14%

4. 11.71%

5. 9.44%

Reference no: EM13942930

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