On January 1, you win $3,440,000 in the state lottery. The $3,440,000 prize will be paid in equal installments of $430,000 over 8 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 5%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.
On January 1, you win $3,440,000 in the state lottery. The $3,440,000 prize will be paid in equal installments of $430,000 over 8 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 5%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA3: Time Value Of Money
Section: Chapter Questions
Problem 20E
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Present Value of an Annuity
On January 1, you win $3,440,000 in the state lottery. The $3,440,000 prize will be paid in equal installments of $430,000 over 8 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 5%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.
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