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starting 1 year from today, you will get 20 annual payments of $1,000,000. But to...

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Basic Math

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starting 1 year from today, you will get 20 annual payments of $1,000,000. But to get your money today you make a deal stating that you will get all of those future payments today assuming the future inflation rate is 10% ($1 a year from now is worth .90, $2 a year from now is worth (.90)2 in general, n dollars in 1 year is worth (.90)n. How much will you get paid NOW? How much will you get paid if the payments go on forever instead of 20 years from now?

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