Please put the solutions into an excel spreadsheet. John won a $$45$ million lottery today. The payout is the following: John gets $$1\mathrm{.}5$ million today and $$1\mathrm{.}5$ million each year for the next $29$ years. How much money worth today for the lottery assuming John$$s federal tax rate is $39\mathrm{.}6\%,$ state tax is $8\mathrm{.}5\%$ and his annual discount rate is $12\%?$

Annual Discount Rate $=12\%$

Annual Income $=1\mathrm{.}5$ million

Annual Federal Tax $=39\mathrm{.}6\%*1\mathrm{.}5$ million $=0\mathrm{.}594$ million

Annual State Tax $=8\mathrm{.}5\%*1\mathrm{.}5$ million $=0\mathrm{.}1275$ million

Annual Net Income $=1\mathrm{.}5$ million $-0\mathrm{.}594$ million $-0\mathrm{.}1275$ million $=0\mathrm{.}7785$ million

Calculate Total Present Value by using the PVOA Formula.

Annuity Factor i $=12\%$ ; time $=29$ years ; Factor $=8\mathrm{.}0218$

PVOA $=$ PMT x Annuity Factor $=0\mathrm{.}7785$ x $8\mathrm{.}0218=6\mathrm{.}244971$ million

Total PV $=$ Initial Net Income $+$ PVOA $=0\mathrm{.}7785$ million $+6\mathrm{.}244971$ million $=7\mathrm{.}02$ million