“Want to win a million dollars? Here’s how. . . . One winner, chosen at random from all entries, will win a $1,000,000 annuity.”

That was the statement announcing a contest on

the World Wide Web. The contest rules described the “million-dollar prize” in greater detail: “40 annual payments of $25,000 each, which will result in a total payment of $1,000,000. The first payment will be made January 1; subsequent payments will be

made each January thereafter.”

Q:Using a compound annual interest rate of 8 percent, what is the present value of this “million-dollar prize” as of the first installment on January 1?