5. Suppose that as a lottery prize you win a trip worth $8,000. You are uninterested in the trip, but under the terms of the prize you can collect the $8,000 in cash, but only if you do not redeem the prize for 3 years. If the interest rate is 5%, the present value of the prize is a) $6911 b) $7619 c) $8,000 d) $21,786

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A: here we calculate the future value and the effective interest rate of the following , so by using…

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A:

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Q: None

A: Step 1:a.We have i = 12%, n = 12$600 (P/A, 12%,12) = 600 * 6.1944 PV = $3,716.62  Step 2:b.here we…

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A: Here we calculate the annual deposit amount by the following method as follow;

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Q: (a) Show the equation for determining the rate of return for buying alife membership. (b) What is…

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A: The objective of the question is to calculate the present value of two different loans. The present…

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A: Given the information: Present value = $3000 g = 2% i = 5% time, t= 10

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A: The payment is made semi-annually. Thus, the time period is 24 semi-annual (12 years) period.…

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A: Future value = 20000 $ Time = 15 years Interest rate = 7 %

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A:

Q: Which of the following coupon bonds have the highest yield to maturity (YTM)? Notation: P = Current…

A: Bond refers to the financial instrument that firms or organizations issue to the investors who want…