Present value of an annuityOn January 1, you win $43,500,000 in the state lottery. The $43,500,000 prize will be paid in equal installments of $7,250,000 over six years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 5%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheetPresent value of an annuity DATA Sum of prize$43,500,000 Annual payment$7,250,000 Number of years6 Interest rate5.0% Date of winJanuary 1 Date of paymentsDecember 31 of each year Using formulas and cell references, perform the required analysis, and input your answer into the Amount column. Transfer the numeric result for the green entry cell (B14) into the appropriate field in CNOWv2 for grading. AmountFormulaPV of annual payments

Present value of winnings is the product of Annual installments and Present value annuity factor .…

Answered: Present value of an annuity On January…

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 $43,500,000 in the state lottery. The $43,500,000 prize will be paid in equal installments of $7,250,000 over six years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 5%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.

Open spreadsheet

Present value of an annuity

DATA
Sum of prize	$43,500,000
Annual payment	$7,250,000
Number of years	6
Interest rate	5.0%
Date of win	January 1
Date of payments	December 31 of each year

Using formulas and cell references, perform the required analysis, and input your answer into the Amount column. Transfer the numeric result for the green entry cell (B14) into the appropriate field in CNOWv2 for grading.

	Amount	Formula
PV of annual payments