Joe won a lottery jackpot that will pay him $12,000 each year for the next en years. If the market interest?

Question

rates are currently 12%, how much does the lottery have to invest today to pay out this prize to Joe over the next en years?

Formula: PV= [1.0 – 1.0/(1.0 + i)^] x A / i

Please show all work and explain each step carefully! Thank you.

Answer 1

$62,510.