Question

A state lotto has a prize that pays $1,200 each week for 35 years. Find the total value of the prize:   If the state can earn 7% interest on investments, how much money will they need to put into an account now to cover the weekly prize payments?

Answer 1

There are about 52 weeks in a year, meaning in 35 years the number of weeks is

`35*52=1820`

And if every week the prize pays $1,200, the total amount it will pay in 1820 weeks is

`1820weeks*1,200\frac{\text{dollars}}{\text{week}}=2,184,000`

Hence, the total value of the prize is $2,184,000.