1. What is the present value of 10 annual payments of $600 at a discount rate of 12%?
a. $3,390
b. $1,332
c. $1,840
d. $1,761
e. $2,825
Please show work.
2. You just won the lottery. To supplement your income you will receive twenty payments of $300,000 to be paid at the end of each of the next twenty years. Using a discount rate of 6%, calculate the present value of the annuity.
a. $3,231,623
b. $3,293,984
c. $3,000,000
d. $2,975,754
e. $3,440,976
Please show work.