Calculating Present Values ] You have just received notification that you have w

Question

Calculating Present Values

] You have just received notification that you have won the $2.08 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 72 years from now. Required: What is the present value of your windfall if the appropriate discount rate is 9 percent? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16). Enter your answer in dollars, not millions, e.g., 1, 234,567.)

Present value $ _________

Explanation / Answer

Solution:

Present Value of reward = Principal * PVIF @ 9% for 72 years Principal = 2,080,000 PVIF @ 9% for 72 years 0.002 Present Value of reward = $ 2,080,000 * 0.0020 4,160

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.