On the way to shop and save you buy a lottery ticket and, Ask an Expert

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On the way to Shop and Save, you buy a lottery ticket and win $100,000. The catch is that the money will be paid to you in two installments: $50,000 today, and $50,000 at the end of 5 years from now.

A) Assuming an interest rate of 8%, what is the present value of your total lottery payments?

B) Suppose that you invest the $50,000 winnings that you receive today and earn 8% annually for the next 5 years. What is the future value of your total lottery payments?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9863268

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