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You just won the lottery. Congratulations! The jackpot is $85,000,000, paid in 10 equal annual payments. The first payment on the lottery jackpot will be made today. In present value terms, you really won assuming annual interest rate of 6.50%.

Respuesta :

Answer:

$65,076,885.59

Explanation:

We use the Present value formula that is shown in the spreadsheet attachment

Given that,  

Future value = $0

Rate of interest = 6.5%

NPER = 10 years

PMT = $85,000,000 ÷ 10 annual payments = $8,500,000

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after solving this, the  present value is $65,076,885.59

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