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?
The current value is the present value of earnings. $1 million a year for 50 years is an annuity and we use the ...
The solution explains the calculation of present value of future cash flows