he Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the states newest millionaire. By choosing the six winning numbers on last weeks state lottery, Mr. Ormsby has won the weeks grand prize totaling $1.02 million. The State Lottery Commission has indicated that Mr. Ormsby will receive his prize in 20 annual installments of $51,000 each.

Required:

1.

If Mr. Ormsby can invest money at a 7% rate of return, what is the present value of his winnings? (Use the appropriate table to determine the discount factor(s).)

Net Present Value
Present Value	X	Factor Value	=	Net Present Value
?	X	?	=	?