Problem:
The lottery is $60,000,000 and the state offers to pay you $3,000,000 per year for the next 20 years, or you can take the lump sum today of $29,500,000. If you choose to take the $3,000,000 per year for 20 years, the state will invest that $29,500,000 today so that it can give you those payments per year for 20 years.
Required:
Question: What rate will the $29,500,000 be invested at today to insure that the $3 million will be available to pay you every year for the next 20 years?
Note: Provide support for your underlying principle.