A lottery claims its grand prize is $10 million, payable over 20 years at $500,000 per year. If the first payment is made immediately, what is this grand prize really worth? Use an interest rate of 6%.
This is a simple present value problem. Using a financial calculator:N 20; PMT 500,000; FV 0; I 6%; Pmts in BEGIN mode.Compute PV : PV $6,079,058.25
