By using this Formula 'Present Value of annuity due(PVA)=C*1/r(1-1/(1+r)^t)*(1+r)', How can I solve the problem...
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By using this Formula 'Present Value of annuity due(PVA)=C*1/r(1-1/(1+r)^t)*(1+r)',
How can I solve the problem below?
Q. You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $375,000 per year. Thus, in one year, you receive $1.375 million. In two years, you get $1.75 million and so on. If the appropriate interest rate is 6.5 percent, what is the value of your winnings today?
Also, is C=1,375,000 in this problem?
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