A major lottery advertises that it pays the winner $10 million. However this prize money is paid at the rate of $500,000 each year (with the first payment being immediate) for a total of 20 payments. What is the present value of this prize at 10% interest compounded annually?

Report your answer in $millions, rounded to two decimal places. So, for example, if you compute the answer to be 5.7124 million dollars then you should submit an answer of 5.71.

  1. 👍
  2. 👎
  3. 👁

Respond to this Question

First Name

Your Response

Similar Questions

  1. statistic

    A lottery ticket has a grand prize of $28 million. The probability of winning the grand prize is .000000023. Based on the expected value of the lottery ticket, would you pay $1 for a ticket? Show your calculations and reasoning

  2. math ( Discrete Functions)

    lottery offers two options for the prize. (7) Option A: $1000 a week for life. Option B: $600 000 in one lump sum. If you choose Option B, you have the opportunity to place the winnings into an investment that also makes regular


    Each year, 64 college basketball teams compete in the NCAA tournament . Sandbox . com recently offered a prize of $10 million to anyone who could correctly pick the winner in each of the tournament games. A. How many games are


    Barrett Industries invests a large sum of money in R & D; as a result, it retains and reinvests all of its earnings. In other words, Barrett does not pay any dividends and it has no plans to pay dividends in the near future. A

  1. math

    A lottery offers two options for the prize. Option A: $1000 a week for life. Option B: $600 000 in one lump sum The current expected rate of return for large investment is 3%/a, compounded monthly. a.Which option would the winner

  2. Math

    A lottery has a grand prize of 23 1/2 million dollars. There are 4 people who have winning tickets and they share this prize equally. How many millions of dollars does each person get? Express the answer as a mixed number.

  3. math urgent

    The state lottery (which has a 6% lottery tax) offers to pay winnings in 25 annual payments or one lump sum, sometimes called a cash-out option. This week’s lottery has a jackpot of $30 million and a cash-out value of $18.2

  4. Math

    The first prize in a lottery is $250 000. Each winner chosen after the first is paid 20% as much as the winner before them. b) Determine an explicit formula for the general term. (2 marks) c) Determine a formula for the sum of n

  1. Stat

    lottery offers one $900 prize, two $700 prize, two $400 prize and five $200 prize. One thousand tickets are sold at $5. Find the expectation if a person buys two tickets

  2. math

    In a contest the prizes were to be $100 for the first place, $50 for second and $20 for the third. Instead, there was 2-way tie for the first place and one third place. If each first prize is twice the value of the third place

  3. Math

    Tickets are drawn to determine first prize money is s100, 000. Each succeeding prize paid 60% as much as the ticket before it. What was the prize money for the 6th ticket drawn? Use the appropriate formula.

  4. English

    A question on "The Lottery" by Shirley Jackson ? I am writing an essay explaining how the use of literary devices creates a sense of horror. I wrote down things like "withheld knowledge" (that the author not telling readers the

You can view more similar questions or ask a new question.