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Imagine you have won the lump sum amount of $ 2500 in a recent contest. However, you must wait until the end of 6 years
Imagine you have won the lump sum amount of $2500 in a recent contest. However, you must wait until the end of 6 years to receive the money. However, you would prefer a different pattern of payments: $225 today and then receive some unknown LUMP SUM (i.e. one time) amount that will be received in 6 years. Using an interest rate of 3.50%, determine the unknown lump sum amount that would make the present value of both prizes equivalent.
$1808.75 | ||
$2796.56 | ||
$2033.75 | ||
$183.04 | ||
$2223.42 |
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