You have just received notification that you have won the $2.13 million first pr
ID: 2718750 • Letter: Y
Question
You have just received notification that you have won the $2.13 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 67 years from now.
Required: What is the present value of your windfall if the appropriate discount rate is 10 percent? (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $
Explanation / Answer
present value of your windfall is $3,589.80 Statemnet showing Cash flows Particulars Time PVf@10% Amount PV Cash inflows 67.00 0.0017 2,130,000.00 3,589.80 PV of Cash Inflows 3,589.80 Time PVF 1.00 0.9091 2.00 0.8264 3.00 0.7513 4.00 0.6830 5.00 0.6209 6.00 0.5645 7.00 0.5132 8.00 0.4665 9.00 0.4241 10.00 0.3855 11.00 0.3505 12.00 0.3186 13.00 0.2897 14.00 0.2633 15.00 0.2394 16.00 0.2176 17.00 0.1978 18.00 0.1799 19.00 0.1635 20.00 0.1486 21.00 0.1351 22.00 0.1228 23.00 0.1117 24.00 0.1015 25.00 0.0923 26.00 0.0839 27.00 0.0763 28.00 0.0693 29.00 0.0630 30.00 0.0573 31.00 0.0521 32.00 0.0474 33.00 0.0431 34.00 0.0391 35.00 0.0356 36.00 0.0323 37.00 0.0294 38.00 0.0267 39.00 0.0243 40.00 0.0221 41.00 0.0201 42.00 0.0183 43.00 0.0166 44.00 0.0151 45.00 0.0137 46.00 0.0125 47.00 0.0113 48.00 0.0103 49.00 0.0094 50.00 0.0085 51.00 0.0077 52.00 0.0070 53.00 0.0064 54.00 0.0058 55.00 0.0053 56.00 0.0048 57.00 0.0044 58.00 0.0040 59.00 0.0036 60.00 0.0033 61.00 0.0030 62.00 0.0027 63.00 0.0025 64.00 0.0022 65.00 0.0020 66.00 0.0019 67.00 0.0017
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