You have just won $50,000 on your Scratch and Win ticket,but you won't be awarded the money until your 40th birthday,20 years from now.If the appropriate discount rate is 15%,what is the present value of your winnings?
A) $3,055.01
B) $3,513,27
C) $2,656.53
D) $3,048.78
E) $3,067.49

Question

Quizplus · Accepted Answer

PV = 11ea7fdb_fc2c_7a41_a768_3b50dcd092d4_TB2902_00 PV = 11ea7fdb_fc2c_7a42_a768_b1a403844f81_TB2902_00 = $3,055.01
Using a financial calculator:
N = 20, I/Y = 15, PMT = 0, FV = -50,000, cpt PV = $3,055.01

You Have Just Won $50,000 on Your Scratch and Win