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Problem:

You have just won the lottery. You will receive $2,510,000 today, and then receive 40 payments of $1,255,000 These payments will start one year from now and will be paid every six months. A representative from Greenleaf Investments has offered to purchase all the payments from you for $25 million. The interest rate is a 8 percent APR compounded daily. Assume there are 12 months in a year, each with 30 days.

Required:

Question: What is the present value of the cash flows from your lottery winnings?

Note: Please show how to work it out.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91163081

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