Mark Young has just won the state lottery, paying $50,000 a year for 20 years. He is to receive his first payment a year from now. The state advertises this as the Million Dollar Lottery because $1,000,000 = $50,000 * 20. Rather than being overjoyed, Mr. Young sues the state for misrepresentation and fraud. His legal brief indicates that in today's dollars he received less than what he was promised. 

What is the present value of this lottery if the interest rate is 8%?

Answer rating: 100% (QA)

pv rja Fr FV 50000 r 82 n 20 years 59000 1008 39 69161 PV 50000 4624630 50000 1008 1008 is SOOOD ... View the full answer