Rita Gonzales won the $41 million lottery. She is to receive $1.5 million a year for the next 19 years plus an additional lump sum payment of $12.5 million after 19 years. The discount rate is 14 percent.   What is the current value of her winnings? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

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Q: what should she pay for this investment today?

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A: Answer image:

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Q: Dinesh

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Q: None

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Q: what amount should she deposit now?

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Q: What is the future value of this prize if each payment is put in an account earning 0.08?

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.