All else equal,if the interest rate is 5%,what is the PDV of a lottery prize that pays $1,000,000 today and $1,000,000 each year for the next 19 years?
A) $10,500,000
B) $12,462,210
C) $13,085,321
D) $20,000,000

Question

Quizplus · Accepted Answer

The present discounted value (PDV) of the lottery prize is calculated by summing the present value of each payment. The first payment is $1,000,000 today, and the subsequent payments are discounted at 5% for each year. Using the formula for the present value of an annuity, the PDV is approximately $13,085,321.

All Else Equal,if the Interest Rate Is 5%,what Is the PDV