The $45.0 million lottery payment that you have just won actually pays $3.0 million per year...
The $45.0 million lottery payment that you have just won actually pays $3.0 million per year for 15 years. The interest rate is 9%.
a. If the first payment comes in 1 year, what is the present value of the winnings? (Do not round intermediate calculations. Enter your answer in millions of dollars rounded to 2 decimal places.)
b. What is the present value if the first payment comes immediately?
Homework Answers
a.
The present value of winnings when payments starts after 1 year is calculated below:
b.
The present value of winnings when payments starts immediately is calculated below:
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The $45.0 million lottery payment that you have just won
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