You just won the lottery. Congratulations! The jackpot is $85,000,000, paid in 10 equal annual payments. The first payment on th

Question

3 years ago

15

e lottery jackpot will be made today. In present value terms, you really won assuming annual interest rate of 6.50%.

1 answer:

Ray Of Light [21] · Answer 1 · 2022-06-17T07:40:46+03:00

Answer:

$65,076,885.59

Explanation:

We use the Present value formula that is shown in the spreadsheet attachment

Given that,

Future value = $0

Rate of interest = 6.5%

NPER = 10 years

PMT = $85,000,000 ÷ 10 annual payments = $8,500,000

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the present value is $65,076,885.59