Question

The Florida lottery agrees to pay the winner $250,000 at the end of each year for the next 20 years. What is the future value of this lottery if you plan to put each payment in an account earning 9 percent?

Answer 1

FV= $12,790,029.91

Step-by-step explanation:

Giving the following information:

The Florida lottery agrees to pay the winner $250,000 at the end of each year for the next 20 years. What is the future value of this lottery if you plan to put each payment in an account earning 9 percent

We need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {250,000*[(1.09^20)-1]}/0.09= $12,790,029.91