The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr. Ormsby has won the week's grand prize totaling $1.18 million. The State Lottery Commission has indicated that Mr. Ormsby will receive his prize in 20 annual installments of $59,000 each. Use Excel or a financial calculator to solve. Round answers to the nearest dollar. Required: 1. If Mr. Ormsby can invest money at a 11% rate of return, what is the present value of his winnings?
The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr. Ormsby has won the week's grand prize totaling $1.18 million. The State Lottery Commission has indicated that Mr. Ormsby will receive his prize in 20 annual installments of $59,000 each. Use Excel or a financial calculator to solve. Round answers to the nearest dollar. Required: 1. If Mr. Ormsby can invest money at a 11% rate of return, what is the present value of his winnings?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's
newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr. Ormsby has won
the week's grand prize totaling $1.18 million. The State Lottery Commission has indicated that Mr. Ormsby
will receive his prize in 20 annual installments of $59,000 each.
Use Excel or a financial calculator to solve. Round answers to the nearest dollar.
Required:
1. If Mr. Ormsby can invest money at a 11% rate of return, what is the present value of his winnings?
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