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July 23, 2014

Homework Help: Finance

Posted by Connie on Tuesday, September 25, 2012 at 10:32am.

Sarah just won a $3,000,000.00 lottery. According to the lottery they will pay her a lump sum of $500,000.00 on October 1, 2012 and the balance in equal annual installments for 10 years.

Assuming that you are the director of the lottery, how much must you have in the account to pay Sarah her initial payment and the 10 remaining payments. Also assume that you have a discount rate of 6%

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