You Have Just Received Notification That You Have Won the $1.4

question 43

Multiple Choice

You have just received notification that you have won the $1.4 million first prize in the Centennial Lottery.However,the prize will be awarded on your 100^th birthday,78 years from now.The appropriate discount rate is 8 percent.What is the present value of your winnings?

• A)$3,288.16
• B)$3,459.99
• C)$5,309.91
• D)$13,333.33
• E)$25,000.00

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Definitions:

Price Level

An encompassing average of prices for goods and services produced at present in the economy.

U.S. Prices

Pertains to the cost of goods and services within the United States, which can be influenced by factors like inflation, demand, and economic policies.

1990s

The decade spanning from January 1, 1990, to December 31, 1999, characterized by significant global political, technological, and cultural changes.

1970s

The decade spanning from 1970 to 1979, marked by significant political, social, and technological changes worldwide.