You have just received notification that you have won the $2.03 million first pr

Question

You have just received notification that you have won the $2.03 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 77 years from now.

Required: What is the present value of your windfall if the appropriate discount rate is 9 percent? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16). Enter your answer in dollars, not millions, e.g., 1, 234,567.)

What is the Present value $ ?

Explanation / Answer

The present value would be

= 2.03/(1.09)^77

=

= 2664.745

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