Shelley wants to cash in her winning lottery ticket. she can either receive six, $193,000 semiannual payments starting today, or she can receive a single-amount payment today based on a 6% annual interest rate. what is the single-amount payment she can receive today?

$1,045,517.95

Explanation:

Data provided in the question:

Semiannual payments = $193,000

Number of semiannual payments, n = 6

Annual interest rate, i = 6% = 0.06

when compounded semiannually = 6% ÷ 2 = 3% = 0.03  

Now,

Single Payment = Semiannual payments × PVAF

here,

PVAF = [ 1 - (1 + i )⁻ⁿ ] ÷ i

or

PVAF = [ 1 - (1 + 0.03 )⁻⁶ ] ÷ 0.03

or

PVAF = 5.4172

Therefore,

Single Payment = $193,000 × 5.4172

= $1,045,517.95

statement of owner"s equity;

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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