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Stacey Trail has just won the Lotto. Her prize pays $40,000 at the end of each year for 5 years. In addition, she will receive
- Stacey Trail has just won the Lotto. Her prize pays $40,000 at the end of each year for 5 years. In addition, she will receive a one-time payment of $240,000 at the end of 5 years. Using the following factors at 10%, what amount has Stacey really won in the Lotto?
| Type of cash flow | (n) Periods | (i) Interest rate | Factor |
| PV of $1 | 5 | 10% | .62092 |
| FV of $1 | 5 | 10% | 1.61051 |
| PV ordinary annuity | 5 | 10% | 3.79079 |
| FV ordinary annuity | 5 | 10% | 6.10510 |
| PV annuity due | 5 | 10% | 4.16986 |
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Management and Cost Accounting
Authors: Colin Drury
8th edition
978-1408093887
