The lottery; 30 annual payments over 29 years Prize of: $372,011,000 If interest rate is 8.1%...
Homework Answers
Rate = 8.1%
Number of years of annuity due = 29+1 = 30
Prize per payments = 372,011,000/30 = 12,400,366.67
Cash value option of PV using annuity due formula =
(1+r)*PMT*(1-(1+r)-n)/r =
(1+8.1%)*12,400,366.67*(1-(1+8.1%)-30)/8.1% =
149,495,571.47
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The
lottery;
30 annual payments over 29 years
Prize of: $372,011,000
If interest rate is 8.1%...
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