Answer:
Present value is $2918.88
Explanation:
Given Data:
Amount won=$2,040,000
Number of years=76 years
Interest rate=i=9%=0.09
Required:
Present value=?
Solution:
Formula
[tex]FV=PV(1+i)^n[/tex]
Where:
FV is the future value=$2,040,000
PV is the present value
i is the interest rate=0.09
n is the number of years=76
[tex]PV=\frac{FV}{(1+i)^n}\\ PV=\frac{\$2040000}{(1+0.09)^{76}}\\ PV=\$2918.88[/tex]
Present value is $2918.88
