International Financial Management 2nd Edition by Geert Bekaert ,Robert Hodrick

Exercise 3

In the entry forms for its contests, Publisher's Clearing House states, "You may have already won $10,000,000." If the Prize Patrol visits your house to inform you that you have won, it offers you$333,333.33 each and every year for 30 years. If the interest rate is 8% p.a., what is the actual present value of the $10,000,000 prize