Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Helen Martin has just won the Lotto. Her prize pays $43200 at the end of each year for 6 years. In addition, she will receive
Helen Martin has just won the Lotto. Her prize pays $43200 at the end of each year for 6 years. In addition, she will receive a one-time payment of $259200 at the end of 6 years. Using the following factors at 11%, what amount has Helen really won in the Lotto? (round to the nearest dollar)
Type of Cash Flow | Periods | Interest Rate | Factor |
---|---|---|---|
PV of $1 | 6 | 11% | 0.5346 |
FV of $1 | 6 | 11% | 1.8704 |
PV ordinary annuity | 6 | 11% | 4.2305 |
FV ordinary annuity | 6 | 11% | 7.9129 |
PV annuity due | 6 | 11% | 4.6959 |
$667565
$565609
$475200
$321326
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started