You have just received notification that you have won the $2 million first prize in the...

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You have just received notification that you have won the $2 million first prize in the Centennial Lottery. However, the priz

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Answer 1

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Answer #1

Amount of Windfall = $2,000,000
Discount Rate = 8.40%
Time Period = 80 years

Present Value = Amount of Windfall / (1 + Discount Rate)^Time Period
Present Value = $2,000,000 / 1.0840^80
Present Value = $2,000,000 / 634.369912
Present Value = $3,152.73

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Answer 2

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