Answer: $18,487,500
Explanation:
From the question, we are informed that I just won the lottery and will receive $1,000,000 in a one year. The payment will be for 35 years and the payments will increase by 2.1 percent per year and the appropriate discount rate is 6.1 percent.
The the present value of the winnings is $18,487,500. The solution to the question has been attached. It should be noted that in the solution,
A = amount = $1,000,000
g = growth rate = 2.1% = 0.021
r = discount rate = 6.1% = 0.061
