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If you have just won the lottery At the end of each of the next 20 years you'll receive a payment of 50000 If the cost of capital is 10 percent per year what's the present value of your lottery win?
Wiki User
∙ 14y ago
Excel's PV (Present Value) formula easily answers the question:
Formula arguments to be used as per below:
rate: 0.1 (10%)
nper (number of periods): 20
pmt (payment): 50,000
=PV (0.1, 20, -50000) i.e. $425,678.19
If one were to receive the payments at the beginning of the period, then:
type: 1
=PV (0.1, 20, -50000, , 1) i.e. $468,246.00
Wiki User
∙ 14y ago
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