1 O A https:/N2 com/ilrn/ta Q Sarch On January 1 you in $50.000.000 in the state
ID: 2402127 • Letter: 1
Question
1 O A https:/N2 com/ilrn/ta Q Sarch On January 1 you in $50.000.000 in the state lottery. The $50,000.000 prze wll be paid in equal natallments of $6.250,00o over sight vea, The payments be made on December 31 the present value tables in txhibit 7. Round to the of each year, beginning on December 31 of this year. If the current lterest rate is 12%, determine the present value of your wnninga. Use nearest whole dollar nore than the present valu. of your winnings using an interest eute of S%? No v (Pie 554 PMExplanation / Answer
Future value of annuity = $50,000,000
Annual Equal Installments =$6,250,000
Interest rate = 12% per annum
Number of Annual Instalments = 8
Present Value of the Lottery Winning = Annual installments x [PVIFA 12%, 8 Years]
= $6,250,000 x 4.967639767
= $31,047,748.54
= $31,047,749 [Rounded to the nearest whole dollar]
“ Therefore, The Answer is $31,047,749 “
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