Present Value of an Annuity

On January 1 you win $5,880,000 in the state lottery. The $5,880,000 prize will be paid in equal installments of $490,000 over 12 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 8%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar. $

EXHIBIT 7

Present Value of Ordinary Annuity of $1 per Period Present Value of Ordinary Annuity of $1 per Period Periods 0.96154 1.73554 166810 3.50515 346511 5.97130 5.14612 5.13166 5.93770 10.56312 7.78615 6.96187 6.14217 1165230 .37916 11.27407 8.54363 8.75563 8.20141 11.01851 9.81815 912855 13.40472 1282115 1445112 12.58317 12.04158 11.53520 1106124 1.27219 3.15170 6.83514 4.09394 12.19788 15.14661 1545130 4.37519 13.00317 13.21053 1340616 12.39237 1389810 14.12142 10.93516 1213711 16.98371 15.14107 11.15841 10.19828 1253181 17.87355 8.11159 17.02286 18.41120 1746101 1165457 14.14553 13.33171 1777407 7.12322 16.93152 10.96168