What is the present value of the Big Lottery's payments if it will pay out $1,500,000 per year forever, with the first payment in 3 years, and at an interest rate of 4%? A $34,670,857.99 B s20,119,623.58 $36,082,109.26 $23,113,905.33
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- If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%16. 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 this grand prize really worth? Use an interest rate of 6%.
- Winners of the PowerState Lottery can take $30 million now or payments of $2.5 million per year for the next 15 years. These are equivalent at what annual interest rate? The answer is closest to what value? (a) 1% (b) 2% (c) 3% (d) 5%You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $580,000 per year. Thus, in one year, you receive $1.58 million. In two years you get $2.16 million, and so on. If the appropriate interest rate is 6.8 percent, what is the value of your winnings today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) present value is ?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%
- 1.1) You have just won the lottery and will receive $2.5 million in one year. You will receive payments for 25 years, and the payments will increase by 3.5 percent per year. If the appropriate discount rate is 6 percent. what is the present value of your winnings? a) Calculate the present value. 1.2) You just inherited a trust that will pay you $100,000 per year in perpetuity. However, the first payment will not occur for exactly four more years. Assume an 8 percent annual interest rate. b) Calculate the value of this trust.You won the lottery and will receive $800,743.61 in 35 years. Assume an interest rate of 7%. What is the value of your winnings today?6-You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 annualinstallments. The first payment is next year. How much is the prize really worth? The discount rate is 8percent.
- The $37.7 million lottery payment that you just won actually pays $2.9 million per year for 13 years. If the discount rate is 8.00% and the first payment comes in 1 year. a. What is the present value of the winnings? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value $ million b. What is the present value of the winnings, if the first payment comes immediately? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Present value $7How much more is a perpetuity paying $5000 at the end of year worth than an annuity paying the same annual amounts at the end of each year for 30 years? Assume an interest rate of 5%. a. $10,635.08 b. $21,976.29 c. $50,000.00 d. $23,137.74 8Miller's Hardware plans on saving $40,000, $50,000, and $58,000 at the end of each year for the next three years, respectively. How much will the firm have saved at the end of the three years if it can earn 6% by reinvesting its saving? a. $155,944.00 b. $169,004.13 c. $148,000.00 d. $148,078.15 9On the day you retire you have $500,000 saved. You expect to live another 30 years during which time you expect to earn 8% on your savings while inflation averages 3.5% annually. Assume you want to spend the same amount each year in real terms and die on the day you spend your last dime. What real amount will you be able to spend each year? a. $61,931.78 b. $79,211.09 c. $79,644.58 d. $30,695.773. You won the lottery! You are considering whether or not to accept a lump sum amount or an annual annuity of $ 91,873 to be received at the end of every year for twelve years. Use 6% as the annual discount rate. How much is the stream of payments worth now? Round your answer to the nearest whole number.