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 won the week's grand prize totaling $1.02 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $51,000 each. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. If Mr. Ormsby can invest money at a 7% rate of return, what is the present value of his winnings? (Enter your answer in dollars an not in millions of dollars.) Present value
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 won the week's grand prize totaling $1.02 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $51,000 each. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. If Mr. Ormsby can invest money at a 7% rate of return, what is the present value of his winnings? (Enter your answer in dollars an not in millions of dollars.) Present value
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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AM.1102.
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 won the week's grand prize totaling $1.02 million. The State Lottery
Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $51,000 each.
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.
Required:
1. If Mr. Ormsby can invest money at a 7% rate of return, what is the present value of his winnings? (Enter your answer in dollars and
not in millions of dollars.)
Present value
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