Asked by Sparkle101
Please how do i calculate this problem.
Your girlfriend just won the Power Ball lottery. She has the choice of $10,000,000 today or a 30-year annuity of $500,000, with the first payment coming today. What rate of return is built into the annuity?
Your girlfriend just won the Power Ball lottery. She has the choice of $10,000,000 today or a 30-year annuity of $500,000, with the first payment coming today. What rate of return is built into the annuity?
Answers
Answered by
Ryan Headley
first payment today: $10,000,000 - $500,000 = $9,500,000
-$9,500,000= PV
$500,000= PMT
29=N
CPT R= 3.078% or 3.08%
-$9,500,000= PV
$500,000= PMT
29=N
CPT R= 3.078% or 3.08%
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