Question
You just won the magazine sweepstakes and opted to take unending payments. The first payment will be $60,000 and will be paid one year from
You just won the magazine sweepstakes and opted to take unending payments. The first payment will be $60,000 and will be paid one year from today. Every year thereafter, the payments will grow by 2.5 percent annually. What is the present value of your prize at a discount rate of 7.9 percent?
| A. | $1,111,111.11 | |
| B. | $999,999.67 | |
| C. | $1,350,000.00 | |
| D. | $1,222,222.50 | |
| E. | $888,888.22 |
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Numerical Methods In Finance
Authors: René Carmona, Pierre Del Moral, Peng Hu, Nadia Oudjane
2012th Edition
3642257453, 978-3642257452
