Determine the unknown lump sum amount that would make

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Reference no: EM131970494

Linus has just won the "Wait To Spend" lottery. Specifically Linus has won the lump sum amount of $1100 but he must wait until the end of 4 years to receive the money.

Linus is in need of cash and would rather receive a different pattern of payments: $200 today and then receive some unknown lump sum amount that will be received in 4 years.

Using an interest rate of 5.50%, determine the unknown lump sum amount that would make the present value of both prizes equivalent.

Reference no: EM131970494

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