Suppose you just won the state lottery, and you have a choice between receiving $2,679,000 today or a 20-year annuity of $261,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes. Group of answer choices 8.96% 7.41% 7.82% 8.55% 7.04%

Q: Suppose you just won the state lottery, and you have a choice between receiving $3,550,000 today or…

A: Choice-1 Amount to receive today is $3,550,000 Choice -2 Annuity amount is $250,000 Time period is…

Q: EVALUATING LUMP SUMS AND ANNUITIES Kristina just won the lottery, and she must choose among three…

A:

Q: A lottery offers you a choice of $1,000,000 per year for 30 years or a lump-sum payment. What…

A: Time value of money: The time value of money is the idea that the value of money received today will…

Q: In 1940, your gA lottery jackpot of one million is paid out $25,000 a year for 40 years. At a 10…

A: a) using excel PV function to calculate present value of annuity due

Q: You have just won the state lottery and have two choices for collecting your winnings. You can…

A: Option-1: Receive $ 105,000 today The present value of option 1 will be equal to the amount to be…

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

A:

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

A: Present value of annuities to be received in future would give the value of money today can be…

Q: What will be the value in your account at the end of Year 30?

A: Future Value of Annuity: It represents the future worth of the annuity payments made for a given…

Q: You have just received notification that you have won the $3.5 million first prize in the Centennial…

A: Present Value is the current value of a cash flow that can be occurred in future. To find the…

Q: Using the time value of money Congratulations! You have won a state lottery. The state lottery…

A: Present value (option #1) = Amount receivable at the end of 5th year *PVF@6% ,5 year =…

Q: A state lotto has a prize that pays $600 each week for 15 years. Find the total value of the prize:…

A: Total value of the prize = Price each week * Number of weeks * Number of years

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: ou have just received notification that you have won the $2.5 million first prize in the Centennial…

A: Using excel PV function

Q: Your girlfriend just won the Florida lottery. She has the choice of $10,700,000 today or a 20-year…

A: Option 1 i.e. Present Value = 10,700,000 Time Period (N) = 20 years Annuity Amount = 1,050,000 End…

Q: You just won the Florida lottery. To receive your winnings, you must select ONE of the twofollowing…

A: While evaluating two financial options, we must take into consideration the importance of present…

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 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: You and 11 coworkers just won 6 million 500k each from state lottery, assuming you each receive your…

A: Total coworkers= 12 Lottery amount= 6,000,000 Share of one coworker= 5,00,000 n (Time period)= 19…

Q: 1. Shanice Johnson, of Philadelphia, Pennsylvania, wants to invest $4,000 annually  for her…

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: How much would you accept in a lump sum today, in place of a lottery payment of $35,000 at the end…

A: Formula:

Q: ohn-Paul Ramin won $2.6 million in a state lottery. He was surprised to learn that he will not…

A: Present value of an annuity computes the discounted value of the future cash flows.

Q: Ahmed Al Khatib has just won the lottery and must choose among three award options: lump sum of $61…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Assume you win a lottery that will pay you $10,000 immediately, plus $20,000 one year from now,…

A: The present value of future cash flows will be calculated by discounting of the future cash flows…

Q: You have just won a large lottery prize.  The Lottery Company says the prize will be paid to you in…

A: The present value of annuity due can be calculated by annuity amount multiply with present value of…

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: Assume that you have just won the lottery. Lotto officials offered you the choice of two alternative…

A: Solution:- Every rational individual will select that option, the present value of which is higher.…

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: 1. Shanice Johnson, of Philadelphia, Pennsylvania, wants to invest $4,000 annually  for her…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Your dreams of becoming rich have just come true. You have won the State of​ Tranquility's Lottery.…

A: We need to calculate rate by using future value and annuity stream  it is calculated using rate…

Q: Your dreams of becoming rich have just come true. You have won the State of​ Tranquility's Lottery.…

A: Given information: Annual payment is of $160,000 Number of years is 25, Interest rate is 6%

Q: A $1.2 million state lottery pays $5,000 at the beginning of each month for 20 years. How much money…

A: (a)  An ordinary annuity is an annuity in which payments are made at the end of each period. An…

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: Suppose a state lottery prize is to be paid in 25 payments of $360,000 each at the end of each of…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: You just won a special lottery which will entitle you to an annual payment $45000 for 10 years, but…

A: In this we have to calculate future value FACTOR and future value.

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.…

Q: Melody won a $30 million lottery today. The payout is the following: Melody gets $1 million today…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

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.

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.