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Chrome File Edit View History Bookmarks People Window Help -82% Wed 10:51 AM E CengageNOWv2 Online teaching and learning resource from Cengage Learning v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker &takeAssignmentSessionLocator-assignment-take;&inprogress-false; Present Value of an Annuity On January 1 you win $4,400,000 in the state lottery. The $4,400,000 prize will be paid in equal installments of $550,000 over 8 years. The payments will be made on December 31 of each year, beginning on December 31, If the current interest rate is 8%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar 1. BE.11-01 2. BE.11-03 3. BE.11-06 ALGO 4. EX.11-05 ALGO 5. EX.11-010.AP.1 ALGO 6. PR.11-02.ALGO 7. PR.11-04.AP.1.AND.AP.2.AL... Check My Work Previous Next Progress: 5/7 items Assignment Score: 0.0% Email Instructor Save and Exit Submit Assignment for Grading

Explanation / Answer

1) Calculation of Present value of winnings :

Present value of Winnings = Annual payment * PVAF@8%,8years

= $550,000 * 5.7466

= $3,160,651

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