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hodyreva [135]
3 years ago
14

You have just received notification that you have won the $1.25 million first prize in the Centennial Lottery. However, the priz

e will be awarded on your 100th birthday, 79 years from now. The appropriate discount rate is 6.4 percent. What is the present value of your winnings
Business
1 answer:
MrRa [10]3 years ago
5 0

Answer:

$9,300.82

Explanation:

The formula for calculating present value:

P = FV (1 + r)^-n

FV = Future value = $1.25 million

P = Present value

R = interest rate = 6.4 percent.

N = number of years = 79

1.25 (1.064)^-79 = $9,300.82

I hope my answer helps you

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