Question
Receive 10 annual payments of $1,000; the first payment of $1,000 is made in one year (t=1). Plus receive one balloon payment of $25,000 in
Receive 10 annual payments of $1,000; the first payment of $1,000 is made in one year (t=1).
Plus receive one "balloon" payment of $25,000 in ten years (t=10).
If the interest rate is 15% (EAR), what is the present value (value today at t=0) of these Lottery Prizes?
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
