Sandra won $5,000,000 in the state lottery,which she has elected to receive at the end of each month over the next thirty years.She will receive 7% interest on unpaid amounts.To determine the amount of her monthly check,she should use a table for the:
A)Future value of $1.
B)Present value of $1.
C)Future value of an annuity of $1.
D)Present value of an annuity of $1.

Question

Quizplus · Accepted Answer

Since Sandra will be receiving a fixed amount of money at the end of each month for a long period of time (30 years), she should use the table for the present value of an annuity of $1. This table will help her determine the present value of each monthly payment, taking into account the interest rate of 7% and the time value of money.

Sandra Won $5,000,000 in the State Lottery,which She Has Elected