On the way to Stop&Shop, you buy a lottery ticket and win $100,000. The catch is that

Question:

On the way to Stop&Shop, you buy a lottery ticket and win $100,000. The catch is that the money will be paid to you in two installments: $50,000 today and $50,000 at the end of 5 years from now.
a. Assuming an interest rate of 8%, what is the present value of your total lottery payments?
b. Suppose that you invest the $50,000 winnings that you receive today and earn 8% annually for the next 5 years. What is the of your total lottery payments?
Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...