What amount has laura really won in the lotto

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Reference no: EM133114716

Question - Laura Hall has just won the Lotto. Her prize pays $48800 at the end of each year for 4 years. In addition, she will receive a one-time payment of $292800 at the end of 4 years. Using the following factors at 13%, what amount has Laura really won in the Lotto?

Type of Cash Flow

Periods

Interest Rate

Factor

PV of $1

4

13%

0.6133

FV of $1

4

13%

1.6305

PV ordinary annuity

4

13%

2.9745

FV ordinary annuity

4

13%

4.8498

PV annuity due

4

13%

3.3612

a) $622,566

b) $556,979

c) $324,730

d) $536,800

Reference no: EM133114716

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