Question

A judge denied a 94-year-old woman s attempt to force a Lottery Commission to pay her $3.21 million winnings up front on the grounds that she otherwise won't live long enough to collect it all. The woman already received an immediate payment of $114,979, and she will receive 22 annual gross checks of $140,683. Suppose that she were able to find a buyer who was willing to buy her lottery ticket which means that the buyer would receive 22 annual gross checks of $140,683. If the woman could invest her money from selling the lottery ticket at 11.7% interest, what would be the fair amount to trade her 22 future lottery receipts?

Answer 1

Loteney wimng 2.21 m. inmediate Pament14,49. Annuat Recearngs 140, 683 224ees The bugen w eceve 22 annual rece en 140,683.. cnterest rat in 7.,uhat oud he lpen amount to trade hea 22 urutt. Lesey aeceips Caleulate Present Valu 22poaual. leteayecaip ALt0,683 22 P 140,683( PIA, n.#7, 22) P 140, 693to.u) (+0. (17) P1 40,683. 79772869) P 1,097,007geY P,09,003