What is the present value of a security, Corporate Finance

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What is the present value of a security

Problem

a) Assume you just hit the $20 million jackpot in New York lottery, which promises you a $1 million every year for the next twenty years or a $10 million today. Which shall you choose?

b) If the interest rate is 10%, what is the present value of a security that pays you $1,100 next year, $1,210 the year after, and $1,331 the year after that?

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