What is the present value of your total lottery payments

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Reference no: EM13291703

On the way to Stop&Shop, you buy a lottery ticket and win $100,000. The catch is that the money will be paid to to you in two installments: $50,000 today, and $50,000 at the end of 5 years from now.

Assuming an interest rate of 8%, what is the present value of your total lottery payments?

Suppose that you invest the $50,000 winnings that you receive today and earn 8% annually for the next 5 years. What is the future value of your total lottery payments ?

Reference no: EM13291703

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