Answers. At the end of the activity, write a brief evaluation of your work. Activity
You've won $1 million in prize money. However, they are not giving all of it to you today. So, is the money
you receive truly the value of your prize? Answer the questions to find out.
Part A
Use the formula to calculate the present value of each payment, assuming an interest rate of 3%. The
first several payments have been done for you. Fill in the present value amounts in the table for years 6,
7, 8, and 9.
(Note: Ignore taxes on winnings in this activity.)
PV = FV (1 + r) +
A
X х.
B I
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E ED 를 들 들
0
D
Future Value
Present Value
$100,000
Today (0 years)
$100,000
$100,000
$97,087
1 year
$100,000
$94,260
2 years
3 years
$91,514
$100,000
$100,000
$88,849
$100,000
$86,261
4 years
5 years
6 years
7 years
$100,000
$100,000
$100,000
8 years
9 years
$100,000