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CHAPTER 3 UHFM 6TH EDITION Assume that you just won $45 million in the Florida lottery, and hence the state will pay you 20 annual

CHAPTER 3 UHFM 6TH EDITION
Assume that you just won $45 million in the Florida lottery, and hence the state will pay you 20
annual payments of $2.25 million each beginning immediately. If the rate of return on securities of
similar risk to the lottery earnings (e.g., the rate on 20-year U.S. Treasury bonds) is 6 percent, what
is the present value of your winnings?

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