Present value of windfall


Problem:

You have just received notification that you have won the $3 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 72 years from now.

Required:

Question: What is the present value of your windfall if the appropriate discount rate is 10 percent?

Note: Explain all steps comprehensively.

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Finance Basics: Present value of windfall
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