On January 1, you win $800,000 in the state lottery. The $800,000 prize will be paid in equal installments of $100,000 over 8 years
On January 1, you win $800,000 in the state lottery. The $800,000 prize will be paid in equal installments of $100,000 over 8 years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Present Value of an Annuity
On January 1, you win $800,000 in the state lottery. The $800,000 prize will be paid in equal installments of $100,000 over 8 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 5%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.
$fill in the blank 1
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