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31 August, 10:41

You just won a contest! you will receive $100,000 a year for 20 years, starting today. if you can earn 12 percent on your investments, what are your winnings worth today?

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  1. 31 August, 10:56
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    The formula that we will use is:

    C * {{1 - [1 / (1 + r) t]}/r} + c

    C = 100,0000

    r =.12

    t = 20

    = 100000 * {{1 - [ 1 / (1 +.12) ^19]} /.12} + 100000

    approximately 836,577.69

    I am using a scientific calculator so just insert right the number and you will come up with the correct answer. The answer in this question is $836,577.69
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