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Posted on Jul 22, 2024

If you won a lottery prize that paid you $13,863 per year in perpetuity (beginning today) what would it be worth in present value terms.

If you won a lottery prize that paid you $13,863 per year in perpetuity (beginning today) what would it be worth in present value terms. Assume that 7% is an appropriate discount rate to evaluate this stream of cash flows?

(The answer is $211,906. Could anyone explain to me how to get that answer?)

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