Find the cash value of the lottery jackpots given below. Yearly jackpot payments begin immediately. Assume the lottery can invest at the given interest rates. Jackpot Amount Interest Rate Equal Annual Payments Present Value (in dollars) $1,000,000 8% 20 $1,000,000 13% 20 $1,000,000 8% 25 $1,000,000 13% 25 Round to the nearest dollar as needed.)

Find the cash value of the lottery jackpots given below. Yearly jackpot payments begin immediately. Assume the lottery can invest at the given interest rates. Jackpot Amount Interest Rate Equal Annual Payments Present Value (in dollars) $1,000,000 8% 20 $1,000,000 13% 20 $1,000,000 8% 25 $1,000,000 13% 25 Round to the nearest dollar as needed.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Find the cash value of the lottery jackpot given below. Yearly jackpot payments begin immediately. Assume the lottery can invest at the given interest rate. $1,000,000 jackpot, 5% interest, 20 annual payment JackpotAmount InterestRate Equal AnnualPayments Present Value(in dollars) $1,000,000 5% 20 $ (Round to the nearest dollar as needed.)
Find the cash value of the lottery jackpot given below. Yearly jackpot payments begin immediately. Assume the lottery can invest at the given interest rate. $19,000,000 jackpot,5 % interest, 20 annual payments (Round to the nearest dollar as needed.) jackpot interest rate equal annual amount Present value 19,000,000 5% 20 Answer
Assume you win a lottery, and you are offered the following stream of payments by the lottery commission: $25,000 today, $32,000 one year from now, another $32,000 two years from now, and a final payment of $55,000 three years from now. You accept the offer. If you invest all of these proceeds at 6% compounded annually and extract nothing from the investment, how much will you have at the end of the fourth year? (RESOURCE: Timing of Cash Flows) NOTE: You can use this equation FV=PV x (1+i)^n or in excel you can use =FV(RATE, NPER(1), 0, AMOUNT(1)), FV=(RATE, NPER(2),0,AMOUNT(2)...... Then add the totals of each row
You have just won a large lottery prize. The Lottery Company says the prize will be paid to you in 8 instalments of $70000, with the first payment occurring today (beginning of year 1), and subsequent payments occurring at the beginning of each year. If the typical market interest rates suggest that you can invest money and earn an interest rate of 9%, compounded annually, then how much is the lottery actually worth today? The solution, please. The correct answer is 422307.
You have won the lottery! The lottery officials have given you a choice between receiving (A) $15,000,000 today, or (B) $1,000,000 at the end of each of the next 20 years. Assuming a market interest rate of 4% (compounded annually), which option is worth more to you today, and by how much?
A lottery claims its grand prize is $15 million, payableover five years at $3,000,000 per year. If the firstpayment is made immediately, what is this grand prizereally worth? Use an interest rate of 7%
The winner of a lottery is given a choice of $1,000,000 cash today or $2,000,000 paid out as follows: $100,000 cash per year for 20 years with the first payment today and 19 subsequent annual payments thereafter. The inflation rate is expected to be constant at 4%/yr over the award period and the winner’s TVOM (real interest rate) is 3.5%/yr. Solve, a. Which choice is better for the winner? Neglect the effect of taxes, life span, and uncertainty. b. At what value of inflation are the two choices economically equivalent? c. What would you do if you do NOT neglect the effect of life span and uncertainty?
A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the first payment is made immediately, what is the grand prize really worth? Use an interest rate of 4%. The real value of the grand prize is $enter your response here. (Round your response to the nearest dollar.)
Assume you won a worldwide lottery that pays $1.55 million in year 0, $5 million in year 1, and $200,000 in years 5 through 100. Assuming that 100 years is as “long” as infinity, calculate the perpetual equivalent annual worth for years 1 through infinity at an interest rate of 10% per year. (Enter your answer in dollars and not in millions.) The perpetual equivalent annual worth for years 1 through infinity is $ .
A lottery offers you a choice of $1,000,000 per year for 30 years or a lump-sum payment. What lump-sum payment (rounded to the nearest dollar) would equal the annual payments if the current interest rate is 1.9% compounded annually? (a) State the type. A. amortization B. present value of an ordinary annuity C. future value of an ordinary annuity D.sinking fund E. none of these (b) Answer the question. (Round your answer to the nearest dollar.)
Use the following time value of money tables for Questions 1-4. Round answers to the nearest dollar. (The annual interest rate for all problems is 6%.) n = 3; i = 6% n = 6; i = 3% Future value of 1 1.19102 1.19405 Present value of 1 .83962 .83748 Future value of an annuity 3.18360 6.46841 Present value of an annuity 2.67301 5.41719 Redlands Inc. will need $4,000 on December 31, 2022. The firm will deposit money into a savings account on January 1, 2020, so that it will grow to be $4,000. The account earns annual interest. The amount Redlands must deposit on January 1, 2020, is $
As the winner of a lottery you are promised 15 payments of $0.98 million each year starting a year from now. If the discount rate is 0.095, what is the present value of your winnings? Instruction: Type ONLY your numerical answer in the unit of millions,

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