contestada

Lucky lou has just won the lottery and will receive an annual payment of $100,000 every year for the next 20 years. if the annual interest rate is 8%, what is the present value of the winnings?

Respuesta :

jushmk
PV = A*[1-(1+r)^-n]/r

A = annual payment = $100,000
r = Interest rate = 8% = 0.08
n = Number of year = 20
PV = present value of the earnings

Therefore,
PV = 100,000*[1-(1+0.08)^-20]/0.08 = $981,814.74

Otras preguntas

Q&A Education