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You have purchased a Lottery card and you won a prize. You will receive 10 yearly payments. The first payment of $100 will arrive next
You have purchased a Lottery card and you won a prize. You will receive 10 yearly payments. The first payment of $100 will arrive next year. The payment will grow by 10% every year for the following 9 years. Assume that the discount rate is 7% and interest is compounded annually. 1. Draw a timeline that shows the cash flow that you will receive each period. Find the present value of this stream of cash flows by hand showing all of your work. 2. Calculate the PV for the same cash flow stream
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