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You have won this weeks lottery. They have promised to pay you $6 million -- in ten yearly installments of $600,000. Assume that the appropriate

You have won this weeks lottery. They have promised to pay you $6 million -- in ten yearly installments of $600,000. Assume that the appropriate interest rate = 8%.

a) What is the present value of your prize if the payments are to begin in one year?

b) What would be the value of your prize if you are to receive the first payment immediately, with the remaining nine payments occurring at yearly intervals?

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