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state lottery payout provides 1.4 million to be paid in 25 installments of 56,000 per payment....

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Finance

state lottery payout provides 1.4 million to be paidin 25 installments of 56,000 per payment. the first 56,000 paymentis immediate and the remaining 24 payments of 56,000 each willoccur at the end of the next 24 years. if 7% is the discount rate,what is the present value of this stream of cash flows?
if 14% is the discount rate, what is the present value of the cashflow?

a. if 7% is the discount rate, the present value ofthe annuity due is $__. (round to the nearest cent)

Answer & Explanation Solved by verified expert
4.2 Ratings (813 Votes)
Part 1 Present value of given stream of cash flows at 7 iscomputed as    See Answer
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