The super prize in a contest is $10 million. This prize will be paid out in equal yearly payments over the next 20 years. If the prize money is guaranteed by AAA bonds yielding 5% and is placed into an escrow account when the contest is announced 1 year before the first payment, how much do the contest sponsors have to deposit in the escrow account? (Round your answer to the nearest cent.)

The super prize in a contest is $10 million. This prize will be paid out in equal yearly payments over the next 20 years. If the prize money is guaranteed by AAA bonds yielding 5% and is placed into an escrow account when the contest is announced 1 year before the first payment, how much do the contest sponsors have to deposit in the escrow account? (Round your answer to the nearest cent.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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