Question
In: Finance
(Present value of annuity payments) The state lottery's million-dollar payout provides for $1.31.3 million to be...
(Present value of annuity payments) The state lottery's million-dollar payout provides for
$1.31.3
million to be paid in
2525
installments of
$52 comma 00052,000
per payment. The first
$52 comma 00052,000
payment is made immediately, and the
2424
remaining
$52 comma 00052,000
payments occur at the end of each of the next
2424
years. If
99
percent is the discount rate, what is the present value of this stream of cash flows? If
1818
percent is the discount rate, what is the present value of the cash flows?
a. If
99
percent is the discount rate, the present value of the annuity due is
$nothing.
(Round to the nearest cent.)
Solutions
Expert Solution
Solution:-
To calculate Present Value of cash flows if Discount Rate is 9%-
Present Value of cash flows is $5,56,743.81
To calculate Present Value of cash flows if Discount Rate is 18%-
Present Value of cash flows is $3,35,449.34
If you have any query related to question then feel free to ask me in a comment.Thanks.
jeff jeffy answered 1 year agoRelated Solutions
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