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