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Sagot :
The current value of these winnings is called the present value.
What is the present value?
Present value is the sum of discounted cash flows. The cash flows that t are expected sometime in the future are discounted using an appropriate discount rate.
The higher the discount rate, the lower the present value and the lower the present value, the higher the present value. The longer in the future the cash flow is expected, the lower the present value and the shorter the time in the future the cash flow is expected, the higher the present value.
For example, the present value of 10,000 expected in 10 years at a discount rate of 10% is 10,000 / (1.10^10) = $3855.43
To learn more about present value, please check: https://brainly.com/question/26537392
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