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Present value

Rita Gonzales won the $60 million lottery. She is to receive $1 million a year for the next 50 years plus an additional lump sum payment of $10 million after 50 years. The discount rate is 10%.What is the current value of her winnings?

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The current value is the present value of earnings. $1 million a year for 50 years is an annuity and we use the ...

Solution Summary

The solution explains the calculation of present value of future cash flows