Problem:
Assume that you just won $125 million in the Powerball lottery, and hence the lottery will pay you 20 annual payments of $6.25 million each beginning immediately.
Required:
Question: If the rate of return on securities of similar risk to the lottery earnings (e.g., the rate on 20-year U.S. Treasury bonds) is 4 percent, what is the present value of your winnings?
Note: Please provide full description.