Assume that Aliza has a winning lottery ticket and she are the given the option of accepting the value of P1,000,000 paying interest three years from now or taking the present value of the P1,000,000 now. The sponsor of the prize is using a 6% interest rate. a. If she choose to receive the present value of the prize now, how much will she receive? b. If she choose to receive the value 3 years from now, how much will she receive? c. Which of the options will give her higher amount?

Assume that Aliza has a winning lottery ticket and she are the given the option of accepting the value of P1,000,000 paying interest three years from now or taking the present value of the P1,000,000 now. The sponsor of the prize is using a 6% interest rate. a. If she choose to receive the present value of the prize now, how much will she receive? b. If she choose to receive the value 3 years from now, how much will she receive? c. Which of the options will give her higher amount?

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

See similar textbooks

Similar questions

Mr. Allen purchased an annuity that pays 19% compouned annually. If the yearly payment is $3,500, how much will Mr. Allen have saved in 2.5 year?
)Eind the differonce betweh the simple interest and" comhound interest on F 32,000 campound yor ohe at 6%. year interest"eing ruckohud hal-yeary.
June Watson is contributing $4,500 each year to a Roth IRA. The IRA earns 3.3% per year. How much will she have at the end of 30 years? If June's first payment is made with the establishment of the Roth IRA, she will have S (Round to the nearest cent as needed.)
Angel's credit card has an APR of 15.32% and a grace period of 25 days, and Angel pays her balance in full every month. If her last billing cycle ended on September 26, and she made a purchase on September 29 and her payment on October 11, how much interest did she owe on her last statement's balance?
TIT. 6. Find the future value of an annuity of $5000 paid if it earns 9% com- year for 10 years, at the end of each pounded annually.
1) Ian placed $2900 in a one-year CD at the bank. The bank is paying simple interest of 6% for one year on the CD. How much insterest will Ian earn in one year?
Bill Jones plans to deposit $2100 at the end of every 6 months for the next 20 yeats into an annuity that pays 6%. What will be the value of Bill's annuity at maturity?