You just won America's Got Talent and were told that your $1 million dollar prize was...

 

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You just won America's Got Talent and were told that your $1 million dollar prize was to be paid out to you over the next 10 years in annual payments of $100,000 year. Assuming a cost of capital of 6% what is the actual present value of your winnings. Instead of winning America's Got Talent you instead won The Voice, which also offered a $1 million prize. The Voice however actually intends to award you a prize that has a present value of $1 million but like Americas Got Talent the prize will be awarded as an annuity that will make equal payments to you over a 10 year period. If the cost of capital is 6% what will be the amount of the annual payments to you if the present value of those payment will equal $1 million? You just won America's Got Talent and were told that your $1 million dollar prize was to be paid out to you over the next 10 years in annual payments of $100,000 year. Assuming a cost of capital of 6% what is the actual present value of your winnings. Instead of winning America's Got Talent you instead won The Voice, which also offered a $1 million prize. The Voice however actually intends to award you a prize that has a present value of $1 million but like Americas Got Talent the prize will be awarded as an annuity that will make equal payments to you over a 10 year period. If the cost of capital is 6% what will be the amount of the annual payments to you if the present value of those payment will equal $1 million?

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To calculate the present value of the winnings for Americas Got Talent we need to determine the pres... View the full answer