you win a lottery prize that has a total value (after taxes) of $35,850,000. 30 yearly payments of $1,195,000 would be made if you took the payment over 30 year payout with the first payment being made immediately and the remaining equal payments being made yearly at the beginning of each year. The lottery would buy an annuity which has an annual interest rate of 5.2%. You elect the alternative and take the cash value of this annuity now. You calculate that you can make more money by investing the winnings at a higher rate than 5.2%. what is the cash value of this annuity?
The main problem for me is knowing which formula to use. is this an ordinary annuity?
The main problem for me is knowing which formula to use. is this an ordinary annuity?
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