A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of return is 4.5%, what is the present value of this prize?

Q: A lottery is offering a payout of 2000 every 4 weeks for 10 years. What is the value of the prize…

A:

Q: A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of…

A: A lottery is a kind of game that engages people into a game of luck and probability, that is, a game…

Q: Imagine that you are the lucky winner of a cash calendar lottery prize! The prize pays regular…

A: GIVEN, A= $500 R= 1.7% M = 12 N =2

Q: You win the Publishers Clearing House Sweepstakes. You can choose between getting a lump sum of…

A: GIVEN, CASH = $5381214 OR A= $700000 N =10 R=5%

Q: The super prize in a contest is $10 million. This prize will be paid out in equal yearly payments…

A: Present value is the present worth of any sum of a money to be received in the future at a specified…

Q: You buy a new piece of equipment for $16,230, and you receive a cash inflow of $2,500 per year for…

A: The internal rate of return (IRR) is the interest rate received for investment with payments and…

Q: ou just won the NY State Lottery. The Grand Prize is $275 million. Lottery officials give you a…

A: Upfront payment  $        27,50,00,000.00 Periodic Payment 15000000 Time Period 25 Interest…

Q: Your grandfather has offered you a choice of one of the three following alternatives: $14,000 now;…

A: Net Present value is the difference between present value of cash inflow and present value of cash…

Q: You buy a new piece of equipment for $11,778, and receive a cash inflow of $2,000 per year for 10…

A: Initial Investment is $11,778 Cash Inflow per year = $2,000 Time Period = 10 Years

Q: The winner of a lottery is given a choice of $1,000,000 cash today or $2,000,000 paid out as…

A: The present value of an annuity is the current worth of the cash flows at a certain discounting rate…

Q: You deposit $13,000 annually into a life insurance fund for the next 10 years, after which time you…

A: The future value is the value of the amount in future that has to be paid or received at future.

Q: You win at a lottery that pays you $1000 a week for life! (a) Assuming that a year counts 365.25…

A: Since the lottery pays $1000 a week A. Total week in a year = 365.257 = 52.17 weeks Total annual…

Q: YOU WIN $500,000 do you want to be paid out all at once or do you want to receive annual end of year…

A: Calculation of Present Value of Annuity Stream:The present value of annuity stream is…

Q: You have just won a $1 million lottery.  This new lottery, however, will pay out the award 60 years…

A: Given: Future value = $1000000 Number of years = 60 Interest rate = 16% = 0.16

Q: You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million…

A: Present value is the current value of a future amount that is to be received or paid out.     Future…

Q: A state lotto has a prize that pays $1,700 each week for 15 years. Find the total value of the…

A: The given problem relates to concept of annuity. An annuity is a series of uniform cash flows over a…

Q: You can purchase an equipment for $4,000. The equipment will provide benefits worth $900 a year. The…

A: We'll compare the price per year with the present value of cash inflows in order to arrive at a…

Q: You deposit $50,000 into a fund that pays 5% per year compounded annually. You plan to make the…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: If you were the $10,000,000 winner of the Mega-Millions Lottery, which payout option would be the…

A: The concept of the time value of money states that the same amount of money is worth more now than…

Q: If you were to invest $50,000 from you lottery winnings today, how much will it be worth in 20 years…

A: To find the future value after some specific some time can be found out by the formula of future…

Q: You have won the lottery! The lottery officials have given you a choice between receiving (A)…

A: Solution Given Two options are (A) $15,000,000 today, or (B) $1,000,000 at the end of each of the…

Q: A. You are offered an investment that will pay you $200 in one year, $400 the next year, $600 the…

A: The present value is today's value of future cash flows. It represents the discounted value of cash…

Q: You just won the lottery and are offered the following payout: $1,000,000 immediately plus another 6…

A: The formula to calculate present value of future cash flow is  Present value = C/(1+i)n Where C is…

Q: A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of…

A: Given Information Annuity Amount = $50,000 Time Period =20 years Current Rate of Return = 3.75%

Q: A lottery winner will receive $1 million at the end of each of the next ten years. What is the…

A: Amount to be received at the end of year (A) = $1 million n = 10 years r = 8.5% We need to find the…

Q: A $500,000 whole life policy is available for $5150 per year, payable at the beginning of the year.…

A: Life policy per year $ 5,150 Insurance amount ($5,150 x 10%) $ 515 Savings plan ($5,150 x 90%) $…

Q: st won a lottery prize of $1,000,000 collectable in 10 yearly installments of $100,000 starting…

A: Value of money grows with the more compounding due to fact that effective interest rate goes on…

Q: An insurance company is offering to sell an annuity for $20,000 cash. In return the firm will…

A: given, present value of annuity = $20,000 first payment =$1100

Q: You expect to receive $150,000 per year on a contract that will last 5 years. You are trying to…

A: Present value of future cash inflows will be equal to the worth of contract today.   Worth of…

Q: A $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of…

A: The value of the lottery prize today is calculated as present value of annuity

Q: Winners of the PowerState Lottery can take $30 million now or payments of $2.5 million per year for…

A: Option C. 3%

Q: In 10 years, you plan to retire and buy a lotin the province. The lot you are looking at currently…

A: The time value of money concept asserts that an amount of money is worth more now than it would be…

Q: You are offered ​$100,000 today or ​$300,000 in 13 years. Assuming that you can earn 11 percent on…

A: Rate of return (r) = 0.11 or 11% Period (p) = 13 years Future value (FV) = $300,000 Present value…

Q: You just won the lottery and are offered the following payout: $1,000,000 immediately plus another 6…

A: Payout: Immediate Payment = 1,000,000 Yearly Payments =  Year Payment 1 500,000.00 2…

Q: Ken Francis is offered the possibility of investing $2,745 today; in return, he would receive…

A: Interest rate: It can be defined as the percent of the principal loan balance, charged by the lender…

Q: You just won the lottery. You and your heirs will receive $40,000 per year forever, beginning 10…

A: PV today, of a perpetuity starting a year from now is given by = P / r where P = perptuity amount…

Q: Assume you won a million dollars in the Texas Lottery. You have two options: 1) collect $426,000 now…

A: Present value: It states that that today's sum of capital is valued more than that of the same…

Q: How much will you have after 15 years?

A: Future value of annuity is the total worth of periodic payments made on regular intervals at a…

Q: Suppose, you have won a lottery prize You have two payment options:  A: Receive $20,000 now B:…

A: Given information: Option A: Receive $20,000 now Option B: Receive $5,800 a year Number of years is…

Q: Imagine that you won $100 million in the lottery and were offered the choice between two payment…

A: RPlan A : Total won Cash flows     = $100             Less : Opportunity cost   = ($39)…

Q: You like to buy lottery tickets every week. The lottery pays an insurancecompany that pays the…

A: Hey, since there are multiple sub-part questions posted, we will answer the first three questions.…