5th december lottery
5th december lottery
Help with Present value of an annuity. Accounting Homework?
Present value of an annuity
On January 1, 2008, you win $40,000,000 in the state lottery. The $40,000,000 prize will be paid in equal installments of $2,000,000 over 20 years. The payments will be made on December 31 of each year, beginning on December 31, 2008. If the current interest rate is 5%, determine the present value of your winnings. Use the present value tables in Appendix A. Round to the nearest whole dollar.
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DCF1 = 2000000 /(1+5%)1 = 1904761.90
DCF2 = 2000000 /(1+5%)2 = 1814058.96
DCF3 = 2000000 /(1+5%)3 = 1727675.20
DCF4 = 2000000 /(1+5%)4 = 1645404.95
DCF5 = 2000000 /(1+5%)5 = 1567052.33
DCF6 = 2000000 /(1+5%)6 = 1492430.79
DCF7 = 2000000 /(1+5%)7 = 1421362.66
DCF8 = 2000000 /(1+5%)8 = 1353678.72
DCF9 = 2000000 /(1+5%)9 = 1289217.83
DCF10 =2000000 /(1+5%)10 =1227826.51
DCF11 =2000000 /(1+5%)11 =1169358.58
DCF12 =2000000 /(1+5%)12 =1113674.84
DCF13 =2000000 /(1+5%)13 =1060642.70
DCF14 =2000000 /(1+5%)14 =1010135.91
DCF15 =2000000 /(1+5%)15 =962034.20
DCF16 =2000000 /(1+5%)16 =916223.04
DCF17 =2000000 /(1+5%)17 =872593.38
DCF18 =2000000 /(1+5%)18 =831041.31
DCF19 =2000000 /(1+5%)19 =791467.91
DCF20 =2000000 /(1+5%)20 =753778.97
NPV = $24,924,420.69
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