Sam Hill has just won the state lottery, paying $70,000 yearly for the next 20 years. Sam will receive his first payment today. If the interest rate is 5%, what is the present value of his lottery winnings? (Enter a positive value and round to 2 decimals

Sam Hill has just won the state lottery, paying $70,000 yearly for the next 20 years. Sam will receive his first payment today. If the interest rate is 5%, what is the present value of his lottery winnings? (Enter a positive value and round to 2 decimals

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 19E: Present Values Krista Kellman has an opportunity to purchase a government security that will pay...

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Question

QUESTION 1 Sam Hill has just won the state lottery, paying $70,000 yearly for the next 20 years. Sam will receive his first payment today. If the interest rate is 5%, what is the present value of his lottery winnings? (Enter a positive value and round to 2 decimals) QUESTION 2 The United Kingdom has a consol bond pays a $150 coupon every 6 months (semi-annually), forever. If the next payment is due precisely six months from today and the discount rate is 10.75% APR (compounded semi-annually), then calculate the present value of this investment. (Round to 2 decimals) [ i need 1,2]

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