You have just won the Multi-State Lottery. You have the option of receiving a check for...

Question

Question

You have just won the Multi-State Lottery. You have the option of receiving a check for $40,000,000 every year at the end of

Answer 1

Answer #1

Let us assume interest rate is X

Present Value Of Annuity
= C*[1-(1+i)^-n]/i]

Where,
C= Cash Flow per period
i = interest rate per period
n=number of period

414842358= $40000000[ 1-(1+X)^-23] /X

1037.106	=1-1.X^-23/X

X = 8%

Interest rate = 8%

Answer 2

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