Question

You just won a contest! you will receive $100,000 a year for 20 years, starting today. if you can earn 12 percent on your investments, what are your winnings worth today?

Answer 1

The formula that we will use is:
C × {{1 - [1/(1 + r)t]}/r} +c

C = 100,0000
r = .12
t = 20

= 100000 * {{1 - [ 1/ (1 + .12)^19]}/ .12} + 100000
approximately 836,577.69

I am using a scientific calculator so just insert right the number and you will come up with the correct answer. The answer in this question is $836,577.69