You have just won the $1000 per week for life jackpot. A fortune teller had predicted this for you a week ago. The fortune teller also said you will live to the age of 90. You are currently 20 years old. What is the present value of your winnings, assuming a 5% APR compounded semi-annually discount rate?
I am not quite sure but here is my solution.
Converting the APR from semi-annually to weekly, I got 0.095016699%.
Payment = 1000
Number of periods is 70x52=3640
Future Value = 3640000
Using a financial calculator, I get that present value = 1134019.91.
Is this correct?