Homework Answers
1. answer is $1000000
here lumpsum is preferred compared to 20 annual payments. therefore, the total winning amount will be received at a time. as this amount is received today it will not be discounted.
2. answer is $45762
amount after 20 years = annuity * FVIFA @8% for 20 years = 1000*45.76196 = $45761.96
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