Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Lottery Winnings The $59.4 million lottery payment that you just won actually pays $2.2 million per year for 27 years. If the discount rate is 12.70% and the first payment comes in 1 year. a. What is the present value of the winnings? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value $15.05 million b. What is the present value of the winnings, if the first payment comes immediately? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)The $59.4 million lottery payment that you just won actually pays $2.2 million per year for 27 years. If the discount rate is 12.70% and the first payment comes in 1 year. a. What is the present value of the winnings? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Transcribed Image Text:Lottery Winnings
The $59.4 million lottery payment that you just won actually pays $2.2 million per year
for 27 years. If the discount rate is 12.70% and the first payment comes in 1 year.
a. What is the present value of the winnings? (Do not round intermediate calculations.
Enter your answer in millions rounded to 2 decimal places.)
Present value
$15.05
million
b. What is the present value of the winnings, if the first payment comes immediately? (Do
not round intermediate calculations. Enter your answer in millions rounded to 2
decimal places.)
Present value
$ 17.25
million
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