ohn-Paul Ramin won $2.6 million in a state lottery. He was surprised to learn that he will not receive a check for $2.6 million. Rather, for twenty years, he will receive an annual check from the state for 1/20 of his winnings. The state finances this series of checks by buying John-Paul a payout annuity. Find what the state pays for John-Paul's payout annuity if the interest rate is 7.2%. (Round your answer to the nearest cent.)

Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter27: Time Value Of Money (compound)
Section: Chapter Questions
Problem 7E
icon
Related questions
Question

John-Paul Ramin won $2.6 million in a state lottery. He was surprised to learn that he will not receive a check for $2.6 million. Rather, for twenty years, he will receive an annual check from the state for 1/20 of his winnings. The state finances this series of checks by buying John-Paul a payout annuity. Find what the state pays for John-Paul's payout annuity if the interest rate is 7.2%. (Round your answer to the nearest cent.)

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Money Management and Achieving Financial Goals
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SWFT Individual Income Taxes
SWFT Individual Income Taxes
Accounting
ISBN:
9780357391365
Author:
YOUNG
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT