Dorothy Taylor has just won the Lotto. Her prize pays $39200 at the end of each year
Fantastic news! We've Found the answer you've been seeking!
Question:
Dorothy Taylor has just won the Lotto. Her prize pays $39200 at the end of each year for 4 years. In addition, she will receive a one-time payment of $235200 at the end of 4 years. Using the following factors at 9%, what amount has Dorothy really won in the Lotto? (round to the nearest dollar)
| Type of Cash Flow | Periods | Interest Rate | Factor |
|---|---|---|---|
| PV of $1 | 4 | 9% | 0.7084 |
| FV of $1 | 4 | 9% | 1.4116 |
| PV ordinary annuity | 4 | 9% | 3.2397 |
| FV ordinary annuity | 4 | 9% | 4.5731 |
| PV annuity due | 4 | 9% | 3.5313 |
$459005
$387343
$293612
$431200
Expert Answer:
Posted Date:
