You’ve won $1 million but aren’t receiving it all today. Rather, you get $100,000 today, then $100,000 every year for the next nine years. Assume that you could invest a lump-sum payment today in an account yielding an interest rate of 3% annually. What’s the total value of the future nine payments today? Round to the nearest dollar.


Select the correct answer.


$778,611

$876,711

$878,611

$1,000,000


What’s the total present value you will be paid?

$778,611
$876,711
$878,611
$1,000,000

Respuesta :

Answer:

I believe that the answer is $876,711

Step-by-step explanation:

Answer:

878611

Step-by-step explanation:

Because the first payment is today this is what we call an annuity due

the annuity due formula is: Annuity immediate formula * (1+i)

[tex](1.03)*100000*(\frac{1-(1+.03)^{-10}}{.03})=878610.8922[/tex]

which rounds to

878611