Question
The $87.5 million lottery payment that you just won actually pays $3.5 million per year for 25 years. If the discount rate is 9.70% and
| The $87.5 million lottery payment that you just won actually pays $3.5 million per year for 25 years. If the discount rate is 9.70% and the first payment comes in 1 year. |
| a. | What is the present value of the winnings? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) |
| Present value | $ million |
| b. | What is the present value of the winnings, if the first payment comes immediately? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) |
| Present value | $ million |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Trade Union Finance
Authors: Marick F. Masters, Raymond Gibney
1st Edition
1032371382, 978-1032371382
