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The statelottery's million-dollar payout provides for $1.5 million to be paid in 20 installments of $75,000 per payment. The first $75,000 payment is madeimmediately, and
The statelottery's million-dollar payout provides for $1.5 million to be paid in 20 installments of $75,000 per payment. The first $75,000 payment is madeimmediately, and the 19 remaining $75,000 payments occur at the end of each of the next 19 years. If 7 percent is the discountrate, what is the present value of this stream of cashflows? If 14 percent is the discountrate, what is the present value of the cashflows?
A. If 7 percent is the discountrate, the present value of the annuity due is $?? (Round to the nearestcent.)
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