You won the lottery! You'll receive $52,000 per year for the next 65 years. At a...
You won the lottery! You'll receive $52,000 per year for the next 65 years. At a discount rate of 5%, what is the current value of your prize? (Round to the nearest whole dollar)
Homework Answers
R = Rate = 5%
PMT = $52,000.00
N = Number of years = 5
PV = Current value = Present value = ?
Formula for PV of payments :
PV = PMT x ((1-(1+R)^-N)/R
PV = 52000 x ((1-(1+5%)^(-65))/5%
PV = $996,375.66
PV = Current value = $996,376
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