Problem 6.44 – Present Value Calculation for a Lottery Prize with Annuity Payments and Increasing Value

Fundamentals of Corporate Finance

Ross, Westerfield, and Jordan

13th Edition

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Difficulty – Medium

Calculate the present value of a lottery prize, given that an individual will receive $1 million today and annual payments that increase by a fixed amount per year. The annual payments will start one year from today, and the appropriate interest rate is given.

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