A college student is reported in the newspaper as having won $10,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $10 million now. Instead she will receive $500,000 at the end of the year for each of the next 20 years. If the annual interest rate is 6%, what is the present value (today’s amount) that she won? (Ignore taxes.)
A college student is reported in the newspaper as having won $10,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $10 million now. Instead she will receive $500,000 at the end of the year for each of the next 20 years. If the annual interest rate is 6%, what is the present value (today’s amount) that she won? (Ignore taxes.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A college student is reported in the newspaper as having won $10,000,000 in the Kansas State Lottery.
However, as is often the custom with lotteries, she does not actually receive the entire $10 million
now. Instead she will receive $500,000 at the end of the year for each of the next 20 years. If the annual
interest rate is 6%, what is the present value (today’s amount) that she won? (Ignore taxes.)
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