Answer:
6079058.246
Step-by-step explanation:
This is annuity due problem, where the payment is made at the beginning of the year. Here, also the payment is made immediately.
Now, applying Annuity due formula
PV= A(1-(1+i)^-n)/i *(1+i)
So, PV is present value of Grand. That is what we want to find
A= annuity (the yearly payment) in this case, it is 500,000
i= is interest rate which is 6%
n= number of years, 20 years
putting all these values in the formula
PV=500,000(1-(1+0.06)^-20)/0.06 *(1+0.06)
we get 6,079,058.246
This is what the grand price of 10 M worth today.
