.Present Value of an Annuity
On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in
equal installments of $6,250,000 over eight years. The payments will be made on December
31 of each year, beginning on December 31 of this year. If the current interest rate is 5%,
determine the present value of your winnings. Use the present value tables in Exhibit 7. Round
to the nearest whole dollar.