Question

Hayley won a lottery and will receive $1,000 each year for the next 30 years. The current value of these winnings is called the ________.

1) Present value
2) Future value
3) Annuity
4) Compound interest

Answer 1

The current value of Hayley's winnings is called the Present value. It represents the value of the money received in the future discounted to its value in the present.

Step-by-step explanation:

The current value of Hayley's winnings is called the Present value. It represents the value of the money received in the future discounted to its value in the present. In this case, the present value is the value of the $1,000 annual payments for the next 30 years, considering the time value of money and any relevant interest rate. The present value takes into account the concept of compound interest, which allows for the calculation of the current worth of future cash flows.