You win the lottery, which pays $1 million in 20 annual $50,000 payments. Your friends ask how much that would be if you received a single lump sum payment today. You do not have your calculator, but you show them which of the following equations to help them solve it themselves, assuming the interest rate is 10 percent?
C) (50,000 * 20)/1.1
E) PV=$1,000,000/1.10

Question

You win the lottery, which pays $1 million in 20 annual $50,000 payments. Your friends ask how much that would be if you received a single lump sum payment today. You do not have your calculator, but you show them which of the following equations to help them solve it themselves, assuming the interest rate is 10 percent?
C) (50,000 * 20)/1.1 
E) PV=$1,000,000/1.10

Quizplus · Accepted Answer

The Answer of You win the lottery, which pays $1 million in 20 annual $50,000 payments. Your friends ask how much that would be if you received a single lump sum payment today. You do not have your calculator, but you show them which of the following equations to help them solve it themselves, assuming the interest rate is 10 percent?
C) (50,000 * 20)/1.1 
E) PV=$1,000,000/1.10

You Win the Lottery, Which Pays $1 Million in 20