Present Value of 1 Future Value of 1

question 45

Multiple Choice

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Sheryl Frasier has won the Indiana state lottery when the jackpot was $9 million. She has chosen to take the prize winnings as $1 million per year over the next nine years. Using a 7% annual interest rate, determine the present value of the $1 million annuity Sheryl will receive.

• A)$9,000,000
• B)$8,370,000
• C)$6,515,200
• D)$5,670,000
• E)$4,895,100

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Definitions:

Household Income

The combined gross income of all members of a household who are 15 years old and higher, regardless of their relationship.

Dental Care Insurance

A type of insurance coverage that pays for part or all of the costs associated with dental health, including preventive care, treatments, and surgeries.

Silver Handshakes

Severance packages offered to encourage older or long-term employees to voluntarily resign, typically as a cost-saving measure for the company.

Women

Refers to adult human females, often discussed in contexts involving gender equality, rights, and social issues.