Joseph has won a lottery prize. He will receive a payment of $160,000 today. He will...

 

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Joseph has won a lottery prize. He will receive a payment of $160,000 today. He will also receive payments at the end of each of the next 10 years. These payments will grow by 5% per year, i.e. the payment one year from today will be 5% more than the payment today, the payment two year from today will be 5% more than the payment one year from today, etc. What is the total present value of the prize that Joseph has won, given a discount rate of 7.0% per year. (Enter your answer to the nearest whole number, without any dollar signs or commas, e.g. 987654) Joseph has won a lottery prize. He will receive a payment of $160,000 today. He will also receive payments at the end of each of the next 10 years. These payments will grow by 5% per year, i.e. the payment one year from today will be 5% more than the payment today, the payment two year from today will be 5% more than the payment one year from today, etc. What is the total present value of the prize that Joseph has won, given a discount rate of 7.0% per year. (Enter your answer to the nearest whole number, without any dollar signs or commas, e.g. 987654)

Answer rating: 100% (QA)

To calculate the total present value of the prize that Joseph has won we need to calculate the prese... View the full answer