How much would you accept in a lump sum today, in place of a lottery payment of $35,000 at the end of the next 20 years ($700,000 in total), assuming you could invest it at a 6 percent rate?

Q: Assume you won a worldwide lottery that pays $5 million in year 0, $5 million in year 1, and…

A: Value of Present Lottery payments = Present Receipt + Present value of Receipt after 1 year +…

Q: Suppose that you won $1,500,000 in the Illinois state lottery. It will be paid to you over 20 years…

A: An annuity is end of year equal payments made for a fixed period of time at a specified interest…

Q: Suppose you just won the state lottery, and you have a choice between receiving $2,679,000 today or…

A: Using Rate function in excel

Q: Congratulations! You have just won a $40 million lottery and have electedto receive $2 million per…

A:

Q: You have just won the lottery and will receive $550,000 in one year. You will receive payments for…

A: Receipt in year 1 = $ 550,000 Annual growth rate = 3% Discount rate = 10%

Q: Felice Lucas has just won the state lottery and has the following three payout options for​…

A: Present value of the first option = Amount receivable at the end of each year x Present value of an…

Q: You are willing to pay $31,250 now to purchase a perpetuity that will pay you and your heirs $2,500…

A: Perpetuity refers to the future cash flow that occurs forever.

Q: Please show excel formulas.

A: According to the time value of money, the value of money obtained today is greater than the value of…

Q: You can receive lottery winnings of either $800,000 now or $100,000 per year for the next 10 years.…

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: Suppose that you won $3,000,000/- in a lottery. You are given the option to take $100,000/- at the…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Assume you win a lottery, and you are offered the following stream of payments by the lottery…

A: Future value of cash flows will be reflective of the value of cash flows in the future after…

Q: Suppose you just won the state lottery, and you have two options: (1) receiving $2,550,000 now or…

A: IRR method provides a benchmark return for equating future worth and present worth.

Q: A lottery claims its grand prize is $5 million, payable over 5 years at $1,000,000 per year. If the…

A: The present value of annuity due formula is used for calculation of the real value of grand price,…

Q: Suppose a state lottery prize is to be paid in 25 payments of $240,000 each at the end of each of…

A: Given,  The payment is $240,000 Term of investment is 25 years

Q: You just won a $625,000 lottery prize!  You will receive $25,000 per year for the next 25 years,…

A: Using present value of annuity due formulae, PV of annuity due = PMT * [1-(1/(1+r)^n)/r] * (1+r)

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: Suppose you just won the state lottery, and you have a choice between receiving $4,500,000 today or…

A: Given, Two options First option Single payment  recieve today   =$4500000 Second option Annual…

Q: Assume that you just won the state lottery. Your prize can be taken either in the form of 100,000 at…

A: Series of payment made at equal interval is called Annuity.

Q: You won $100 000 in a lottery and you want to set some of that sum aside for 10 years. After 10…

A: A concept that implies the future worth of the money is lower than its current value due to several…

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: Congratulations! You have just won a $40 million lottery and have elected to receive $2 million per…

A: Given information: Total prize money is $40,000,000 Annual payment is $2,000,000 Number of years…

Q: You have received $200,000 from the PowerBall Lottery and want to have half that amount available…

A: Total lottary amount = $200,000 Amount required at retirement (FV) = $200,000/2 = $100,000 Interest…

Q: You can retire at age 62 and receive $8,000 per year or retire at age 65 and receive $10,000 per…

A: Choice 1: Annual receipt is $8,000. Discount rate is 2%. Maturity is (70 - 62) 8 years.   Choice 2:…

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: What is the future value of this prize if each payment is put in an account earning 0.08?

A: Future value of annuities refers to the sum total value of all payments made on a periodic basis at…

Q: If you are offered 300,000 in 13 years and you can earn 11% on your money what is the present value…

A: The concept of the time value of money states that the current worth of money is more than its value…

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

A: The question gives the following information:

Q: Suppose you just won the state lottery, and you have a choice between receiving $4,500,000 today or…

A: The rate of return is the rate at which the investment project provides the return to the investors.…

Q: ane Bauer has won the lottery and has the following four options for receiving her winnings:…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…

Q: You have won the lottery, and you must choose between three award options. You can select one of the…

A: Formula required  Present value FACTOR =1-(1+r)^-n/r  Present value =Future value/(1+r)n r=interest…

Q: Suppose you just won the state lottery, and you have a choice between receiving $3,600,000 today or…

A: An annuity is the series of fixed payment which will be received in certain intervals. The rate of…

Q: The winner of a million dollar" lottery is to receive $60,000 plus $60,000 at the end of each year…

A: Given: Amount received at the end of each year (R) =$60000No. of years(n)=39Rate of interest(i)=8%…

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: You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: You just won the lottery, which promises you $440,000 per year for the next 20 years. You receive…

A: Given data; Payment amount = $440,000 number of payments = 20 discount rate = 9% annuity due

Q: You win a lottery payout of $10,000 a year for the next 30 years. If your investment rate is 8…

A: Present Value:  The present value (PV) is the present sum of a series of fixed payments. The series…

Q: how large must the annual annuity payments be to make you indifferent between the two​ choices?

A: Present Value: It is the present worth of the future amount or future annuity payments.  These…

Q: The winner of a state lottery will receive $5,000 per week for the rest of her life. If the winner’s…

A: Present Value of Annuity = Amount ÷ Rate of Interest

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: A winner of the multi-state lotto won a one-time payout and decided to invest part of it into an…

A: Present value (PV) = $ 9,500,000 Interest rate = 3.1% Monthly interest rate (r) = 3.1%/12 =…

Q: Assume that you just won the state lottery. Your prize can be taken either in the form of $40,000 at…

A: Present value is the current worth of future cashflows discounted at any given rate.