V. PRESENT VALUE OF AN ANNUITY:

1. You are lucky to win the Lotery. The prize is 3 million. You have the option (1) to receive a single amount once, Ignore the tax. Discount rate 3.5%

1. What is the present value of option (1)?

V. PRESENT VALUE OF AN ANNUITY:

1. You are lucky to win the Lotery. The prize is 3 million. You have the option (1) to receive a single amount once, (2) receive an identical annuity each year, for 20 years. Ignore the tax. Discount rate 3.5%

1. What is the present value of option (1)?