Winners of the Georgia Lotto drawing are given the choice of receiving the winning amount divided equally over 19 years or as a lump-sum cash option amount. The cash option amount is determined by discounting the annual winning payment at 8% over 19 years. This week the lottery is worth $3 million to a single winner. What would the cash option payout be?

$615,304.33

Explanation:

In order to solve this, we need to use the compound interest formula to calculate the final amount after deducting the 8% for 19 years. The formula is the following...

Where:

A = the future value of the investment/loan, including interest

P = the principal investment amount (the initial deposit or loan amount)

r = the annual interest rate (decimal)

n = the number of times that interest is compounded per unit t

t = the time the money is invested or borrowed for

Now we plug in the values and solve for A

Therefore, the final lump sum payout would be $615,304.33

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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