the Florida lottery Agrees to pay the winner $254,000 at the end of the year for

Question

the Florida lottery Agrees to pay the winner $254,000 at the end of the year for the next 20 years. What is the future value of this prize if each payment is put in an account earning 0.08? the Florida lottery Agrees to pay the winner $254,000 at the end of the year for the next 20 years. What is the future value of this prize if each payment is put in an account earning 0.08? the Florida lottery Agrees to pay the winner $254,000 at the end of the year for the next 20 years. What is the future value of this prize if each payment is put in an account earning 0.08?

Explanation / Answer

Answer:

Calculation of Future value using future value of annuity formula:

Future value = Annuity * Future value annuity factor (FVAF) (Rate , year)

= 254000 * FVAF (8%, 20 years )

=254000* 45.76196

= $11623537.84

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