On January 1, 2016, you win $50,000,000 in the state lottery. The $50,000,000 prize will be...

 

 

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On January 1, 2016, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31, 2016. If the current interest rate is 5%, determine the present value of your winnings. Use Table 2. Round to the nearest whole dollar. Will the present value of your winnings using an interest rate of 12% be more than the present value of your winnings using an interest rate of 5%? No ✓ Present Value of Ordinary Annuity of $1 per Period Periods 4.0% 4.5% 5% 0.95694 0.95238 1.87267 1.85941 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 40 45 50 0.96154 1.88609 2.77509 3.62990 4.45182 5.24214 6.00205 6.73274 7.43533 8.11090 8.76048 9.38507 9.98565 10.56312 11.11839 11.65230 12.16567 12.65930 13.13394 13.59033 14.02916 14.45112 14.85684 15.24696 15.62208 15.98277 16.32959 16.66306 16.98371 17,29203 17.58849 17.87355 18.14765 18.41120 18.66461 19.79277 20.72004 21.48218 2.74896 3.58753 4.38998 5.15787 5.89270 6.59589 7.26879 7.91272 8.52892 9.11858 9.68285 10.22283 10.73955 11.23402 11.70719 12.15999 12.59329 13.00794 13.40472 13.78442 14.14777 14.49548 14.82821 15.14661 15.45130 15.74287 16.02189 16.28889 16.54439 16.78889 17.02286 17.24676 17.46101 18.40158 19.15635 19.76201 2.72325 3.545956 4.32948 5.07569 5.79637 6.46321 7.10782 7.72173 8.30641 8.86325 9,39357 9.89864 10.37966 10,83777 11.27407 11.69959 12.08532 12.46221 12.82115 13.16300 13.48857 13.79864 14.09394 14.37519 14.64303 14.89813 15.14107 15.37245 15.59281 15.80268 16.00255 16.19290 16.37419 17.15909 17.77407 18.25593 5.5% 0.94787 1,84632 2.69793 3.50515 4.27028 4.99553 5.68297 6.33457 6.95220 7,53763 8.09254 8.61852 9.11708 9.58965 10.03758 10.46216 10.86461 11.24607 11.60765 11.95038 12.27524 12.58317 12.87504 13.15170 13.41393 13.66250 13.89810 14.12142 14.33310 14.53375 14.72393 14.90420 15.07507 15,23703 15.39055 16.04612 16.54773 16.93152 6% 0.94340 1.83339 2.67301 3.46511 4,21236 4.91732 5,58238 6.20979 6.80169 7.36009 7.88687 8.38384 8.85268 9.29498 9.71225 10.10590 10.47726 10,82760 11.15812 11.46992 11.76408 12.04158 12.30338 12.55036 12.78336 13.00317 13.21053 13.40616 13.59072 13.76483 13.92909 14.08404 14.23023 14.36814 14.49825 15.04630 15.45583 15.76186 6.5% 0.93897 1.82063 2.64848 3,42590 4.15568 4.84101 5.48452 6.08875 6.65610 7,18883 7.68904 8.15873 8.59974 9.01384 9.40267 9.76776 10.11058 10.43247 10.73471 11.01851 11.28498 11.53520 11.77014 11.99074 12.19788 12.39237 12.57500 12.74648 12.90749 13.05868 13.20063 13.33393 13.45909 13.57661 13.68696 14.14553 14.48023 14.72452 7% 0.93458 1.80802 4.76654 5.38929 5.97130 2.62432 2.57710 3.38721 3.31213 4.10020 3.99271 6.51523 7.02358 8% 9.44665 9.76322 10.05909 0.92593 1.78326 7,49967 7.13896 7.53608 10.33560 10.59401 7.94269 8.35765 7.90378 8.22424 4.62288 5.20637 8.74547 9.10791 8.55948 11.82578 11.98671 12.13711 5.74664 6.24689 6.71008 12.85401 12.94767 8.85137 9.12164 9.37189 10.83553 10.01680 11.06124 10.20074 11.27219 10.37106 11.46933 10.52876 10.67478 11.65358 9.60360 9.81815 10.80998 10.93516 11.05108 12.27767 11.15841 12.40904 11,25778 12.53181 11.34980 12.64656 11.43500 12.75379 11.51389 11.58693 11.65457 13.33171 11.92461 13.60552 12.10840 13.80075 12.23348 9% 0.91743 1.75911 2.53129 3.23972 3.89965 4.48692 5.03295 5.53482 5.99525 6.41766 6.80519 7,16073 7.49690 7.78615 8,06069 8.31256 8.54363 8.75563 8.95011 9.12855 9.29224 9.44243 9.58021 9.70661 9.82258 9.92897 10.02658 10.11613 10.19828 10.27365 10.34280 10.40624 10.46444 10.51784 10.56682 10.75736 10.88120 10.96168 10% 0.90909 1.73554 2.48685 3.16987 3.79079 4.35526 4.86842 5.33493 5.75902 6.14457 6.49506 6.81369 7.10336 7.36669 7.60608 7.82371 8.02155 8.20141 8.36492 8.51356 8.64869 8.77154 8.88322 8.98474 9.07704 9.16095 9.23722 9.30657 9.36961 9.42691 9.47901 9.52638 9.56943 9.60857 9.64416 9.77905 9.86281 9.91481 11% 0.90090 1.71252 2.44371 3.10245 3.69590 4.23054 4.71220 5.14612 5.53705 5.88923 6.20652 6.49236 6.74987 6.96187 7.19087 7.37916 7.54879 7.70162 7.83929 7.96333 8.07507 8.17674 8.26643 8.34814 8.42174 8.48806 8.54780 8.60162 8.65011 8.69379 8.73315 8.76860 8.80054 8.82932 8.85524 8.95105 9.00791 9.04165 12% 0.89286 1.69005 2.40183 3.03735 3.60478 4.11141 4.56376 4.96764 5.32825 5.65022 5.93770 6.19437 6.42355 6.62817 6.81086 6.97399 7.11963 7.24967 7.36578 7.46944 7.56200 7.64465 7.71843 7.78432 7.84314 7.89566 7.94255 7.98442 8.02181 8.05518 8.08499 8.11159 8.13535 8.15656 8.17550 8.24378 8.28252 8.30450 13% 0.88496 1.66810 2.36115 2.97447 3.51723 3.99755 4.42261 4.79677 5.13166 5.42624 5.68694 5.91765 6.12181 6.30249 6.46239 6.60389 6.72909 6.83991 6.93797 7.02475 7.10155 7.16961 7.22966 7.28288 7.32998 7.37167 7.40956 7.44120 7.47009 7,49565 7.51828 7.53830 7.55602 7.57170 7.58557 7.63438 7.66086 7.67524 14% 0.87719 1.64666 2.32163 2.91371 3.43308 3.88867 4.28830 4.63886 4.94637 5.21612 5.45273 5.66029 5.84236 6.00207 6.14217 6.26506 6.37286 6.46742 6.55037 6.62313 6.68696 6.74294 6.79206 6.83514 6.87293 6.90608 6.93515 6.96066 6.98304 7.00266 7.01988 7.03498 7.04823 7.05985 7.07005 7.10604 7.12322 7.13266 On January 1, 2016, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31, 2016. If the current interest rate is 5%, determine the present value of your winnings. Use Table 2. Round to the nearest whole dollar. Will the present value of your winnings using an interest rate of 12% be more than the present value of your winnings using an interest rate of 5%? No ✓ Present Value of Ordinary Annuity of $1 per Period Periods 4.0% 4.5% 5% 0.95694 0.95238 1.87267 1.85941 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 40 45 50 0.96154 1.88609 2.77509 3.62990 4.45182 5.24214 6.00205 6.73274 7.43533 8.11090 8.76048 9.38507 9.98565 10.56312 11.11839 11.65230 12.16567 12.65930 13.13394 13.59033 14.02916 14.45112 14.85684 15.24696 15.62208 15.98277 16.32959 16.66306 16.98371 17,29203 17.58849 17.87355 18.14765 18.41120 18.66461 19.79277 20.72004 21.48218 2.74896 3.58753 4.38998 5.15787 5.89270 6.59589 7.26879 7.91272 8.52892 9.11858 9.68285 10.22283 10.73955 11.23402 11.70719 12.15999 12.59329 13.00794 13.40472 13.78442 14.14777 14.49548 14.82821 15.14661 15.45130 15.74287 16.02189 16.28889 16.54439 16.78889 17.02286 17.24676 17.46101 18.40158 19.15635 19.76201 2.72325 3.545956 4.32948 5.07569 5.79637 6.46321 7.10782 7.72173 8.30641 8.86325 9,39357 9.89864 10.37966 10,83777 11.27407 11.69959 12.08532 12.46221 12.82115 13.16300 13.48857 13.79864 14.09394 14.37519 14.64303 14.89813 15.14107 15.37245 15.59281 15.80268 16.00255 16.19290 16.37419 17.15909 17.77407 18.25593 5.5% 0.94787 1,84632 2.69793 3.50515 4.27028 4.99553 5.68297 6.33457 6.95220 7,53763 8.09254 8.61852 9.11708 9.58965 10.03758 10.46216 10.86461 11.24607 11.60765 11.95038 12.27524 12.58317 12.87504 13.15170 13.41393 13.66250 13.89810 14.12142 14.33310 14.53375 14.72393 14.90420 15.07507 15,23703 15.39055 16.04612 16.54773 16.93152 6% 0.94340 1.83339 2.67301 3.46511 4,21236 4.91732 5,58238 6.20979 6.80169 7.36009 7.88687 8.38384 8.85268 9.29498 9.71225 10.10590 10.47726 10,82760 11.15812 11.46992 11.76408 12.04158 12.30338 12.55036 12.78336 13.00317 13.21053 13.40616 13.59072 13.76483 13.92909 14.08404 14.23023 14.36814 14.49825 15.04630 15.45583 15.76186 6.5% 0.93897 1.82063 2.64848 3,42590 4.15568 4.84101 5.48452 6.08875 6.65610 7,18883 7.68904 8.15873 8.59974 9.01384 9.40267 9.76776 10.11058 10.43247 10.73471 11.01851 11.28498 11.53520 11.77014 11.99074 12.19788 12.39237 12.57500 12.74648 12.90749 13.05868 13.20063 13.33393 13.45909 13.57661 13.68696 14.14553 14.48023 14.72452 7% 0.93458 1.80802 4.76654 5.38929 5.97130 2.62432 2.57710 3.38721 3.31213 4.10020 3.99271 6.51523 7.02358 8% 9.44665 9.76322 10.05909 0.92593 1.78326 7,49967 7.13896 7.53608 10.33560 10.59401 7.94269 8.35765 7.90378 8.22424 4.62288 5.20637 8.74547 9.10791 8.55948 11.82578 11.98671 12.13711 5.74664 6.24689 6.71008 12.85401 12.94767 8.85137 9.12164 9.37189 10.83553 10.01680 11.06124 10.20074 11.27219 10.37106 11.46933 10.52876 10.67478 11.65358 9.60360 9.81815 10.80998 10.93516 11.05108 12.27767 11.15841 12.40904 11,25778 12.53181 11.34980 12.64656 11.43500 12.75379 11.51389 11.58693 11.65457 13.33171 11.92461 13.60552 12.10840 13.80075 12.23348 9% 0.91743 1.75911 2.53129 3.23972 3.89965 4.48692 5.03295 5.53482 5.99525 6.41766 6.80519 7,16073 7.49690 7.78615 8,06069 8.31256 8.54363 8.75563 8.95011 9.12855 9.29224 9.44243 9.58021 9.70661 9.82258 9.92897 10.02658 10.11613 10.19828 10.27365 10.34280 10.40624 10.46444 10.51784 10.56682 10.75736 10.88120 10.96168 10% 0.90909 1.73554 2.48685 3.16987 3.79079 4.35526 4.86842 5.33493 5.75902 6.14457 6.49506 6.81369 7.10336 7.36669 7.60608 7.82371 8.02155 8.20141 8.36492 8.51356 8.64869 8.77154 8.88322 8.98474 9.07704 9.16095 9.23722 9.30657 9.36961 9.42691 9.47901 9.52638 9.56943 9.60857 9.64416 9.77905 9.86281 9.91481 11% 0.90090 1.71252 2.44371 3.10245 3.69590 4.23054 4.71220 5.14612 5.53705 5.88923 6.20652 6.49236 6.74987 6.96187 7.19087 7.37916 7.54879 7.70162 7.83929 7.96333 8.07507 8.17674 8.26643 8.34814 8.42174 8.48806 8.54780 8.60162 8.65011 8.69379 8.73315 8.76860 8.80054 8.82932 8.85524 8.95105 9.00791 9.04165 12% 0.89286 1.69005 2.40183 3.03735 3.60478 4.11141 4.56376 4.96764 5.32825 5.65022 5.93770 6.19437 6.42355 6.62817 6.81086 6.97399 7.11963 7.24967 7.36578 7.46944 7.56200 7.64465 7.71843 7.78432 7.84314 7.89566 7.94255 7.98442 8.02181 8.05518 8.08499 8.11159 8.13535 8.15656 8.17550 8.24378 8.28252 8.30450 13% 0.88496 1.66810 2.36115 2.97447 3.51723 3.99755 4.42261 4.79677 5.13166 5.42624 5.68694 5.91765 6.12181 6.30249 6.46239 6.60389 6.72909 6.83991 6.93797 7.02475 7.10155 7.16961 7.22966 7.28288 7.32998 7.37167 7.40956 7.44120 7.47009 7,49565 7.51828 7.53830 7.55602 7.57170 7.58557 7.63438 7.66086 7.67524 14% 0.87719 1.64666 2.32163 2.91371 3.43308 3.88867 4.28830 4.63886 4.94637 5.21612 5.45273 5.66029 5.84236 6.00207 6.14217 6.26506 6.37286 6.46742 6.55037 6.62313 6.68696 6.74294 6.79206 6.83514 6.87293 6.90608 6.93515 6.96066 6.98304 7.00266 7.01988 7.03498 7.04823 7.05985 7.07005 7.10604 7.12322 7.13266

Answer rating: 100% (QA)

The present value of the winning amount is 31047750 ... View the full answer