You just won the Publisher's Clearing House Sweepstakes and the right to 20 after-tax ordinary annuity cash flows of $163,291.18. Assuming a discount rate of 7.50%, what is the present value of your lottery winnings? Use a calculator to determine your answer.

asked by gillianp

11 years ago

1,613 views

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1 answer

PV = 163291.18 (1 - 1.075)^-20)/.075
= $ 1,664,670.52

answered by Reiny

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Question

You just won the Publisher's Clearing House Sweepstakes and the right to 20 after-tax ordinary annuity cash flows of $163,291.18. Assuming a discount rate of 7.50%, what is the present value of your lottery winnings? Use a calculator to determine your answer.

1 answer

PV = 163291.18 (1 - 1.075)^-20)/.075
= $ 1,664,670.52

Reiny · Accepted Answer

PV = 163291.18 (1 - 1.075)^-20)/.075 = $ 1,664,670.52