Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Tonight's Powerball lottery has a $ 6 0 million Jackpot. If you win you have two choices: 1 ) Take a 2 6 year Annuity

Tonight's Powerball lottery has a $60 million Jackpot.
If you win you have two choices:
1) Take a 26 year Annuity starting Today or
2) Take the Cash (Present) Value of the above cash flows.
If you elect to take the Cash (Present) Value and the Lottery Commission uses a 5% Discount Rate (Interest rate), what is the $$ amount you'd get today?
DROP ALL THE ZEROS.. JUST ENTER THE MILLIONS. EXAMPLE: IF YOUR ANSWER IS 12,340,000 SIMPLY ENTER 12.34
(I know the answer is 34.83 but I need help getting there)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

9781119563099

Students also viewed these Finance questions