Homework Help: Accounting Math

Posted by Sparkle101 on Wednesday, April 14, 2010 at 7:31am.

Please how do i calculate this problem.

Your girlfriend just won the Power Ball lottery. She has the choice of $10,000,000 today or a 30-year annuity of $500,000, with the first payment coming today. What rate of return is built into the annuity?

Accounting Math - Ryan Headley, Tuesday, March 20, 2012 at 2:07pm
first payment today: $10,000,000 - $500,000 = $9,500,000

-$9,500,000= PV
$500,000= PMT
29=N
CPT R= 3.078% or 3.08%

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