Assignment Task: Suppose you were the sole winner of the Power Ball Lottery and the corresponding $500 million jackpot. You may either receive either a lump sum payment now, or a series of twenty-five $20 million payments per year, beginning immediately for 25 periods. If the current 25-year interest rate is 4.5%, compounded annually,
1) What should the lump sum payment be today to make you indifferent between receiving a lump sum payout or receiving the $20 million per year 25-year annuity set of payments?
2) What do you call this type of annuity?