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The Caldwell Herald newspaper reported the following story. Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last
The Caldwell Herald newspaper reported the following story. Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr. Ormsby won the week's grand prize totaling $1,6 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $80.000 each. Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor(5) using tables. Required: 1. If Mr. Ormsby can invest money at a 12% rate of return, what is the present value of his winnings? (Enter your answer in dollors and not in millions of dollars.)
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