This is the second time I post this question today. I need to know if my interpr

Question

This is the second time I post this question today. I need to know if my interpretation is correct. I know the present value answer is correct.

Please tell me if my interpretation is correct. Thank you.

Use the formula for the nth partial sum of a geometric series shown below. The winner of a $4,000,000 sweepstakes will be paid $200,000 C cost of raising a child to 17, middle-income family] per year for 20 years. The 20 money earns 8% interest per year. The present value of the winnings is 200,000 1.08 Compute the present value. (Round your answer to two decimal places.) 1963629.48 Interpret its meaning. The $4,000,000 sweepstakes has a present value of $4,000,000. After accruing interest over the 20-year period, it attains its full value. The $4,000,000 sweepstakes has a present value of $2,945,444.22 [s cost of 30-second Super Bowl advertisement, 2011]. After accruing interest over the 10-year period it attains its full value. o The $4,000,000 sweepstakes has a present value of $1,963,629.48. After accruing interest over the 20-year period it attains its full valu O The $4,000,000 sweepstakes has a present value of $3,927,258.96. After accruing interest over the 15-year period it attains its full value The $4,000,000 sweepstakes has a present value of $1,863,629.48. After a interest over the 20-year period, it attains its fu value

Explanation / Answer

Yes the interpretation is also correct as the amount paid per year is not exactly $200,000 but it is slightly less by a factor of interest i.e. 1/1.08 so that after getting interest it's value becomes $200,000 per year. So after 20 years of accruing the interest the sum will attain it's full value of $4,000,000.

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