Type 2D: Prizes are often not "worth" as much as claimed. Publisher's Clearing House has been advertising a sweepstake, "Win $5,000 a Week Forever - You'd get $5,000.00 a week for life, thenafter that, someone you choose gets $5,000.00 a week for their life!" What is the value of this sweepstake in today's term if you are the winner?beginning of each week beginning today and assumeYou will receive $5, 000 forever at thethat the average annual interest for the 'long' years to come is 5.2%.

As there is more compounding the effective rate tend to increase with increase in compounding.

a are often not "worth" as much as claimed. Publisher's Clearing House has been advertising a aweepatake, "win $5,000 a Week Forever - You'd get $5,000.00 a week for meone you choose geta $5,000.00 a week for their life!" What is the value of this sweepatake in today's term if you are the winner? You will receive $5,000 forever at ach week beginning today and assume that the average annual interest for the 'long' years to come is 5.24.

a are often not "worth" as much as claimed. Publisher's Clearing House has been advertising a aweepatake, "win $5,000 a Week Forever - You'd get $5,000.00 a week for meone you choose geta $5,000.00 a week for their life!" What is the value of this sweepatake in today's term if you are the winner? You will receive $5,000 forever at ach week beginning today and assume that the average annual interest for the 'long' years to come is 5.24.

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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| 1. After defeating the Dark Lord, Ron's brother offers him a job at Weasleys' Wizard Wheezes. If Ron takes this job, his annual income will be 1 million galleons. Alternatively, Ron can return to Hogwarts to finish school, but then he must give up the job with his brother. Graduating will take him a year and it will cost 10,000 galleons in direct costs. He knows for sure he can become an Auror after finishing his education, at a yearly salary of 800,000 galleons. He thinks that the probability that he becomes Minister of Magic 25 years after graduating (at Year 27) is 25%, and the minister's salary is 10 million galleons per year. Regardless of his choice, he wants to retire in 30 years from now (at Year 30). Assume the interest rate is 5%. Assume all payments are at the beginning of the year and all wages are paid at the beginning of the year. a. If Ron is only concerned with the monetary rewards, will he go back to Hogwarts? If you are using equations, write down the appropriate…
You just won the lottery! As your prize, you will receive $1,200 a month for 2 years. If you can earn 6 percent on your money, what is this prize worth to you today? a 13942.72 b 27075.44 c 2382.12 d 2364.47
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely.
Suppose you have $1,500,000 when you retire and want to withdraw an equal amount each year for the next 30 years. - How much can you withdraw each year if you earn 7% - What if you can earn 9%? - What if the market failed and your earnings dropped to -.5%. How long would it take to drain your account if you did nothing about this loss pattern?
You see on TV that the Mega Millions is up to $2 million! You decide to buy a ticket ......... and you WIN!!! Unfortunately, you do not get that amount right away. Instead, this is the future value of an annuity. Let us examine some choices you have regarding your big win. a) You could choose to collect your winnings today, in the present day. The lottery people could invest this present value and earn 2.7% interest, compounded annually, and have the $2 million in 25 years. How much would they give you today? b) The interest rate in part (a) is very conservative. You have a “friend” who advises you to take the money today and invest it with him, at 6.6% compounded quarterly, for those 25 years. How much would you have in 25 years if you did this? (What is the future value of the amount you computed in part (a)?) c) Otherwise, you could choose to take the annuity. They will pay you nothing in the present day but will pay you A dollars each month for 25 years. Assume 2.7% interest…
19) would love the help.
I recently found a real-life advertisement in the newspaper. (Only the phone number has been changed.) Suppose that you have won a $20,000,000 lottery, paid in 20 annual installments. How much would be a fair price to be paid today for the assignment of this prize? Assume the money could be invested at 12%. (Assume the lottery pays out as an ordinary annuity. Round your answer to the nearest cent.) $ la-7:30p ffordable. 555-8310. Massage 55 in/o CARE 555-372 DUCH 8-3590 * 21 Massage In Call 253 E LOAN WANTED: $150,000, se- sold unless cured by approx. $600,000 clearly indic equity In four sepsele proper- and telemai pay 1476 and five ptain the be en earni or implied. ma es eve advertiseme or do no or quirement Have exc. credit. 555-4285. *** WE PAY CASH *** for R.E notes, lotteries, annuities, bus. notes, Inheritances. Please call 800-555-7853. 2 ENTREPRENEURS need invesnot be resp to establish a juice error, we as Min. S Interest. 555-4668. 15% be reportec may take e $6000 NEEDED for…
The local electronics store is offering a promotion "1-year: same as cash," meaning that you can buy a TV now, and wait a year to pay (with no interest). So, if you take home a $1,200 TV today, you will owe them $1,200 in one year. If your bank is offering 4% interest, what is the true cost of the TV to you today? The true cost of the TV to you today is $ (Round to the nearest cent.)

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