Question

You have just won the lottery. You will receive $2,560,000 today, and then receive 40 payments of $1,280,000 These payments will start one year from now and will be paid every six months. A representative from Greenleaf Investments has offered to purchase all the payments from you for $20 million. The interest rate is an APR of 9 percent compounded daily. Assume there are 12 months in a year, each with 30 days. What is the present value of the cash flows from your lottery winnings? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g. 32.16.) Present value

Answer 1

wellove to Calculate P.v of - P. v of six Monthly de future Cash Inflow Installments of $ 1280000 wsing discount Rate of 9. /:p a confounded daily. Effective Interest Rate for 1 year = (1+0.09 1/2x30 12x30 = 9.4162/ for Six Month= (1 +0.09 16x30 -1 = 4.6022% Piu = $ 128000 ito.094/62 +€1280000 - AF(39 times, 1.046027 | to.09 4162 $1280000 + $ 2300 2702.41 teoq4462 - $ 22192968.1437 - S 220 192968 Million RoN I I since offer frice questment ū is Not of $20 Million from Green bot Less than fou of $22019 Million vrable to accept alles

Answer 2

23221562.78