You have just won a lottery! You can either receive $6,500 a year for 20 years or $100,000 as a lump sum payment today. What is the interest rate on the annuity option?

a. 2.64%
b. 1.68%
c. 2.20%
d. 2.45%
e. 1.95%

Ans: a. 2.64%

Business

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