a. A lottery claims its grand prize is $2 million, payable over 4 years at $500,000 per year. If the first payment is made three years from now, what is this grand prize really worth today? Use an interest rate of 6%. b. What is the yield to maturity on a simple loan for $2 million that requires a repayment of $2.5 million in three years' time?

a. A lottery claims its grand prize is $2 million, payable over 4 years at $500,000 per year. If the first payment is made three years from now, what is this grand prize really worth today? Use an interest rate of 6%. b. What is the yield to maturity on a simple loan for $2 million that requires a repayment of $2.5 million in three years' time?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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