Answer:
$ 11, 978,133.75
Explanation:
The grand prize of 15,000,000 is worth the present value of the prize at an 8% interest. The prize is paid every year, meaning its an annuity case.
The present value of an annuity is calculated using the formula
PV = P × 1 − (1+r)−n
r
Where
P $3,000,000
r is 8% 0r 0.08
n is 5
PV = $3,000,000 x 1-(1+0.08) - 5
0.08
PV =$3,000,000 x 1 - 0. 6805831
0.08
PV = $ 3,000, 000 x 3.99271
PV = 11, 978,133.75
