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Prizes are not often not "worth"as much as claimed. Place a value on a prize of $5,000,000 which is to be received in equal payment over 20 years, with the first payment beginning today.Assume an interest rate of 7% over the 20 years.

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Prizes are not often not "worth"as much as claimed. Place a value on a prize of $5,000,000 which is to be received in equal payment over 20 years, with the first payment beginning today.Assume an interest rate of 7% over the 20 years.

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Solution Summary

Computations are shown for you. The expert examines the prizes which are not often not "worth" as claimed.

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The annual payment of the prize is
PMT = 5000,000/20 = $250,000
Number of years = 19 (the first payment ...

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