You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $450,000 per year. Thus, in one year, you receive $1.45 million. In two years, you get $1.9 million, and so on. If the appropriate interest rate is 6.2 percent, what is the value of your winnings today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Present value : $ 22,656,191.50
You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $450,000 per year. Thus, in one year, you receive $1.45 million. In two years, you get $1.9 million, and so on. If the appropriate interest rate is 6.2 percent, what is the value of your winnings today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Present value : $ 22,656,191.50
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:You just won the TVM Lottery. You will receive $1 million today plus another 10 annual
payments that increase by $450,000 per year. Thus, in one year, you receive $1.45
million. In two years, you get $1.9 million, and so on.
If the appropriate interest rate is 6.2 percent, what is the value of your winnings today?
(Do not round intermediate calculations and enter your answer in dollars, not millions
of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.)
Present value : $ 22,656,191.50
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