Question
The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the states newest millionaire. By choosing the six winning numbers on last
The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the states newest millionaire. By choosing the six winning numbers on last weeks state lottery, Mr. Ormsby has won the weeks grand prize totaling $1.26 million. The State Lottery Commission has indicated that Mr. Ormsby will receive his prize in 20 annual installments of $63,000 each. |
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. |
Required: | |
1. | If Mr. Ormsby can invest money at a 12% rate of return, what is the present value of his winnings? (Round discount factor to 3 decimal places.) |
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