You have just won the Reader's Digest lottery of $5,000 per year for twenty years, with the first payment today followed by nineteen more start-of-the-year cash flows. At an interest rate of 5%, what is the present value of your winnings?
A) $100,000.00
B) $65,426.60
C) $62,311.05
D) $47,641.18
Answer: B
Explanation: B)
PV = PMT × × (1 + r)1 = $5,000 × × (1.05)1 = $65,426.60.
MODE = BEGIN
INPUT 20 5 ? -5,000 0
KEY N I/Y PV PMT FV
CPT 65,426.60
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