Suppose that Maria wins a $7 million lottery and is trying to decide whether to take $2 million all at once or $7 million over 20 years. One bit of information Maria would need to know is what the prevailing will be over the next 20 years.

Interest Rate

Explanation:

The Interest Rate will be the most important factor that Maria will consider in deciding whether to leave her money in the bank or withdraw all at once.

An interest on the money (called the Principal) appreciates/increases the value of the money over time. If the value of the money was going to remain the same, Maria could have as well withdrawn all the $7 million and keep at home.

Interest can be calculated either using the Simple Interest or the Compound Interest formula.

c

explanation:

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30