A $1.2 million state lottery pays $5,000 at the beginning of each month for 20 years. How much money must the state actually have in hand to set up the payments for this prize if money is worth 8%, compounded monthly? (a) Decide whether the problem relates to an ordinary annuity or an annuity due. (b) Solve the problem. (Round your answer to the nearest cent.)

Q: On January 1 you win $800,000 in the state lottery. The $800,000 prize will be paid in equal…

A: PV stands for the Present Value, which is defined as the current value of the future amount of money…

Q: Jake won $350,000 in the lottery! He will receive $35,000 each year at the beginning of each of the…

A: The objective of this question is to calculate the present value of Jake's lottery winnings. The…

Q: Congratulations. You just won the California State Lottery. The amount awarded is paid in 20 equal…

A: Present value:Present value refers to the concept in finance and economics that assigns a lower…

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A: Annual cash inflow (P) = $ 91,873 Discount rate (r) = 6% Number of annual deposits (n) = 12

Q: On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal…

A: Present value: Present value means the discounted value of a future sum of money at a given…

Q: 3) equal deposits. The first deposit is made right now, the second, one year from now, and the…

A: Given data; amount needed to be accumulated = $ 25,000 Number of year= 3 interest rate = 5% deposits…

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

A: Annuity refers to the periodic payment or receipt of cash flow. The annuity period usually…

Q: m January 1, you win $46,000,000 in the state lottery. The $46,000,000 prize will be paid in equal…

A: Present value is the equivalent value today of the future cash flow that is to be received in the…

Q: On January 1 you win $1,900,000 in the state lottery. The $1,900,000 prize will be paid in equal…

A: Present value: This is the amount of future value reduced or discounted at a rate of interest till…

Q: On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal…

A: Present value of future cash inflow discounted at 12% is the present value of your winnings

Q: I recently found a real-life advertisement in the newspaper. (Only the phone number has been…

A: Lottery amount = $10,000,000 Annual payment (P) = 10,000,000/20 = $500,000 Number of annual payments…

Q: . Lottery Winnings The winner of a “million dollar”lottery is to receive $50,000 plus $50,000 at…

A: present value of annuity (PVA)=A×1-11+rnr A=annuity r=rate of interest n=number of years

Q: corporation hopes to withdraw $9,000 at the end of each year for six years from a fund that earns 7%…

A: Variables in the question:Withdrawal each year (PMT)=$9000 n=6 yearsRate=7%

Q: A    rich donor gives a    hospital    $1,040,000    one year from today. Each year after that, the…

A: First donation (F) = $1,040,000 Growth rate (g) = 0.06 Interest rate (r) = 0.11 Period (n) = 10…

Q: On January 1, you win $4,800,000 in the state lottery. The $4,800,000 prize will be paid in equal…

A: Present value of winnings = Annual installments x Present value factor (6%, 10 years)

Q: * The Powerball Lottery, worth $280 million, was won by a single individual. The winner was given…

A: In this problem, we're dealing with the concept of the time value of money. Essentially, money…

Q: On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal…

A: NPV is also known as Net present value. It is a capital budgeting techniques which help in decision…

Q: You hold a winning ticket from your provincial lottery. It entitles the bearer to receive annuity…

A: An annuity is a financial product that provides a fixed stream of payments to an individual over a…

Q: On January 1, you win $2,500,000 in the state lottery. The $2,500,000 prize will be paid in equal…

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A: True value of prize means present value of all payments made for 11 years which is called annuity.…

Q: You have just received notification that you have won the $2.19 million first prize in the…

A: Present value is current value of future cash flow discounted at an appropriate discount rate; in…

Q: None

A: Present value:Present value is popularly known in short as PV. It is a concept of accounting that…

Q: Oriole Enterprises would like to have $970,000 saved up in 12 years to fund equipment and building…

A: Future Value (FV) = $970,000Number of years (n) = 12Payment per year (PMT) = $53,100Present Value…

Q: A corporation creates a sinking fund in order to have $590000 to replace some machinery in 9 years.…

A: Future value refers to the value at the end of the tenure of future cash flows at the regular…

Q: What is the fair value of the lottery payments according to the Financial Accounting Standards Board…

A: According to the financial accounting standards board (FASB), The fair and present value of the…

Q: A corporation creates a sinking fund in order to have $680,000 to replace some machinery in 12…

A: Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

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A: The future value function or concept can be used to determine the future value of a present sum or…

Q: Acompany is considering an investment of $538,000 in a land development project. The investment will…

A: NPV or net present value is an important capital budgeting tool. It is the sum of present values of…

Q: Q10. James decided to fund a school in Orange County in perpetuity. The first payment will be made…

A: Present value refers to the discounted value of future cash flows. A perpetuity is a series of equal…

Q: A lottery winner will receive $6 million at the end of each of the next twelve years. What is the…

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Q: On January 1. you win $60.000.000 in the state lottery. The $60.000.000 prize will be paid in equal…

A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS  Solution:  Present value of winnings:  Payment…

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A: Present value (PV) of all the cash flows is the sum of the money deposited now. It is an example of…

Q: On January 1, you win $46,000,000 in the state lottery. The $46,000,000 prize will be paid in equal…

A: Present value is the worth of future cash flows at a discounted rate.

Q: 3: A lottery winner has a decision between a lump sum of $1,000,000 or a 20 year annuity of $100,000…

A: The lump sum amount is $1,000,000. The annual payment is $100,000. The rate of interest is 5%. The…

Q: 1. Let the annual interest rate be 6%. Compute 871 Enter an answer correct to 6 decimal places.…

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

Q: Jake won $350,000 in the lottery! He will receive $35,000 each year at the beginning of each of the…

A: The objective of this question is to calculate the present value of the lottery winnings. The…

Q: perpetual equivalent annual worth

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Q: A corporation creates a sinking fund in order to have $790,000 to replace some machinery in 11…

A: A fund that is created to repay a debt or replacement of an asset by putting an equal sum of amount…

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.