Homework Answers
Lump sum payment amount of Lottery= Present value of Annuity due = annual payment X[ 1-{ (1+r)-n/r}] X (1+r)]
=$1000000 X[1-{(1+0.05)-30/0.05}] X (1+0.05)]
=$1000000 X 16.14107358
=$16141073.58
Payment of taxes =$16141073.58 X 40% =$6456429.432
Answer= Money received after payment = $16141073.58 X 60%= $9684644.148 = $9684644 (Nearest whole number)
Note:- r = rate of interest =5℅ or 0.05
, n = no. of payment= 30
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