EXERCISE $14$A$-6$ Basic Present Value Concepts $\frac{\frac{?}{?}}{?}$ LO$14-7$

The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr$.$ Ormsby won the week's grand prize totaling $$1\mathrm{.}6$ million. The State Lottery Commission indicated that Mr$.$ Ormsby will receive his prize in $20$ annual installments of $$80,000$ each.

Required:

If Mr$.$ Ormsby can invest money at a $12\%$ rate of return, what is the present value of his winnings?

Is it correct to say that Mr$.$ Ormsby is the "state's newest millionaire"? Explain your answer.

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