Brooke won $100 000 in a lottery. The price will be paid in yearly installments of $10 000 each year for 10 years. What is the present value of her winnings, if the current interest rates are 6.4% per annum, compounded annually?

Answer 1

P(1 + 0.064)^10 = 100000
P = 53,775.40

Answer 2

We are asked for the present value of an annuity

present value = $10,000(1 - 1.064)^-10 / .064
= $72,225.92

Answer 3

ouch! forgot about the payments!
good catch, as usual.