You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $450,000 per year. Thus, in one year you receive $1.45 million. In two years, you get $1.7 million, and so on. If the appropriate interest rate is 8%, what is the present value of your winnings?

$22,419,192.19

Explanation:

i used an excel spreadsheet to calculate the future payments and their present value. If the payments increase by $450,000 each year, the second payment will equal $1.9 million, not $1.7 million.

year      payment  

0      $1,000,000  

1      $1,450,000

2      $1,900,000

3      $2,350,000  

4      $2,800,000  

5      $3,250,000  

6      $3,700,000  

7      $4,150,000  

8      $4,600,000  

9      $5,050,000  

10      $5,500,000  

present value = $22,419,192.19

there is no following so id just amuse false

it should be