What is the present value of the winnings? what is the, Ask an Expert

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The $32.5 million lottery payment that you just won actually pays $1.3 million per year for 25 years. If the discount rate is 10% and the first payment comes in 1 year.

a) What is the present value of the winnings?

b) What is the present value of the winnings, if the first payment comes immediately?

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