A state lotto has a prize that pays S800 each week for 20 ye

A state lotto has a prize that pays S800 each week for 20 years. Find the total value of the prize: S If the state can earn 3% interest on investments, how much money will they need to put into an account now to Preview cover the weekly prize payments? Preview Reminder: There are 52 weeks in a year.

Solution

Total value of the prize = Prize x 52 weeks x 20 Years

Total value of the prize = $800 x 52 x 20

Total value of the prize = $832,000

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Using financial calculator BA II Plus - Input details:

#

I/Y = Rate /52 = 3/52 =

0.05769231

PMT = Payment =

-$800.00

N = Total number of periods = Years x 52 = 20*52 =

1040

FV = Future Value =

$0.00

CPT > PV = Investment today = $625,516.18907 or $625,516.19

$625,516.19

Please apply rounding as per your requirement.

Using financial calculator BA II Plus - Input details:	#
I/Y = Rate /52 = 3/52 =	0.05769231
PMT = Payment =	-$800.00
N = Total number of periods = Years x 52 = 20*52 =	1040
FV = Future Value =	$0.00
CPT > PV = Investment today = $625,516.18907 or $625,516.19	$625,516.19