Assume that you won $400 million in the mega million lottery. How much have you really won? In answering this question, consider the concept of the time value of money. Can you write down how much you have won in an equation if you go for the lump sum payout over 20 years?
Assume that you won $400 million in the mega million lottery. How much have you really won? In answering this question, consider the concept of the time value of money. Can you write down how much you have won in an equation if you go for the lump sum payout over 20 years?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Assume that you won $400 million in the mega million lottery. How much have you really won? In answering this question, consider the concept of the time value of money. Can you write down how much you have won in an equation if you go for the lump sum payout over 20 years? (Hint: take a look at the coupon bond equation in Chapter 4 of the textbook. The problem is very similar to a coupon bond with one key difference
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