Present Value The winner of a $2,000,000 sweepstakes will be paid $100,000 per year for
Chapter 9, Problem 83(choose chapter or problem)
Using a Geometric Series In Exercises 83-86, use the formula for the nth partial sum of a geometric series
\(\sum_{i=0}^{n-1} a r^{i}=\frac{a\left(1-r^{n}\right)}{1-r}\).
Present Value The winner of a $2,000,000 sweepstakes will be paid $100,000 per year for 20 years. The money earns 6% interest per year. The present value of the winnings is \(\sum_{n=1}^{20} 100,000\left(\frac{1}{1.06}\right)^{n}\). Compute the present value and interpret its meaning.
Text Transcription:
Sum_i=0^n-1 ar^i = a(1-r^n)/1-r
Sum_n=1^20 100,000 (1/1.06)^n
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