Question

You just won the lottery. congratulations! the jackpot is $10,000,000, paid in eight equal annual payments. the first payment on the lottery jackpot will be made today. in present value terms, you really won —assuming annual interest rate of 8.00%.

Answer 1

An annuity that pays $1,000 at the beginning of each year

PTM of the annuity selling for 2,541.15 $ 437.50

Present value of the Jackpot: $62,063,701

Step-by-step explanation:

Because is at the beginning, the 1,000 will be generating interest right away.

So even the 500 at the beginning will have a slightly higher rate, it cwon't compensate the 1,000 upfront.