The $55.0 million lottery payment that you have just won actually pays $2.2 million per year for 25 years. The interest rate is 10%. a. If the first payment comes in 1 year, what is the present value of the winnings? (Do not round intermediate calculations. Enter your answer in millions of dollars rounded to 2 decimal places.) Present value I b. What is the present value if the first payment comes immediately? (Do not round intermediate calculations. Enter your answer in
The $55.0 million lottery payment that you have just won actually pays $2.2 million per year for 25 years. The interest rate is 10%. a. If the first payment comes in 1 year, what is the present value of the winnings? (Do not round intermediate calculations. Enter your answer in millions of dollars rounded to 2 decimal places.) Present value I b. What is the present value if the first payment comes immediately? (Do not round intermediate calculations. Enter your answer in
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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Transcribed Image Text:The $55.0 million lottery payment that you have just won actually pays $2.2 million per year for 25 years. The interest rate is 10%.
a. If the first payment comes in 1 year, what is the present value of the winnings? (Do not round intermediate calculations. Enter your
answer in millions of dollars rounded to 2 decimal places.)
Present value
I
b. What is the present value if the first payment comes immediately? (Do not round intermediate calculations. Enter your answer in
millions of dollars rounded to 2 decimal places.)
Present value
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