Math

A lottery prize worth $1,000,000 is awarded in payments of $10,000 five times a year for 20 years. Suppose the money is worth 20% compounded five times per year.

What is the formula used to find the present value of the prize?

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asked by Nick
  1. i = .20/5 = .04
    n = 20x5 = 100

    PV = 10 000(1 - 1.04^-100)/.04
    = 245 049.99

    20% interest!!! Wow, what fantasy place is this?

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    posted by Reiny

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