You just won the lottery, which promises you $440,000 per year for the next 20 y

Question

          You just won the lottery, which promises you $440,000 per year for the next 20 years.  You receive the first payment today (hint:   annuity due).  If your discount rate is 9.00%, what is the present value of your winnings? ((((((((If you have a finance calculator, please explain the keystrokes used to figure this out, thank you!!))))))))
                                                                  $4,378,050                                               $4,592,674                                               $4,263,810                                               $4,111,618                                                               $4,016,560
          You just won the lottery, which promises you $440,000 per year for the next 20 years.  You receive the first payment today (hint:   annuity due).  If your discount rate is 9.00%, what is the present value of your winnings? ((((((((If you have a finance calculator, please explain the keystrokes used to figure this out, thank you!!))))))))
                                            $4,378,050                                               $4,592,674                                               $4,263,810                                               $4,111,618                                          $4,378,050         

Explanation / Answer

Hi,

Please find the answer as follows:

Nper = 20

PMT = 440000

Rate = 9%

FV = 0

Type = 1 (since it is annuity due)

Present Value = PV(rate,nper,pmt,fv) = PV(9%,20,440000,0,1) = 4378050.50 or 4378050

Answer is Option 1 (4378050)

Thanks.

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