Jia has just won a $20 million lottery, which will pay her $1 million at the end of each year for 20 years. An investor has offered her $10 million for this annuity. She estimates that she can earn 10 percent interest, compounded annually, on any amounts she invests. She asks your advice on whether to accept or reject the offer. What will you tell her? (Ignore Taxes)

Q: Bing gave $800 to her cousin. As a token of gratitude, her cousin gave her $1, 520 at the end of the…

A: Details given are : Present value = $800 Future value = $1520 Time period = 1 year From above…

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A:

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A: Step 1:Step 2:

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A: Your annual investment, PMT = $ 1,500    Starting age = 25Number of Years, n = 15Annual Interest…

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A: Here,

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A: The FV of an investment refers to the value of the cash flows of the investment at a future date…

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A: An annuity is a set of equal payments made at a set rate over a predetermined amount of time.…

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A: the answer with complete calculation are as follows

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A: Compounding refers to the factor that allowed investors to generate higher returns on the investment…

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A: Future value:

Q: how much money must be removed from the estate to purchase the annuity?

A: ==> The amount required on the child's 18th birthday to fund the annuity is calculated using PV…

Q: Jim wants to deposit an amount anually to meet his retirement needs. Assume that he will deposit a…

A: In the span of 25 years, the interest rate is 6% on both the deposits and the withdrawals. First…

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A: The present value of growing perpetuity is calculated by

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A: GIVEN, Age of Maria = 25  retirement age = 65 therefore number of years of savings = 65- 25 = 40…

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A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: Maryann is planning a wedding anniversary gift of a trip to Hawaii for her husband at the end of 3…

A: Future value represents the future worth of existing cash flows. It is determined by compounding…

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A: The given problem can be solved using RATE function in excel. RATE function provides interest rate…

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A: Solution Given Alternative 1 Simple interest Rate 10% Present value 2500000…

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A: The computation is as follows:

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A: Present value is value required today which would give the same future value based on the time and…

Q: determine if Elora would be able to buy the land

A: First we need to determine the effective annual interest rate using the formula below:

Q: John and Denise are partners at a law firm. They have decided to set aside a fund for their loyal…

A: Compound = Monthly = 12Time = t = 10 * 12 = 120John Payment = jp = $100Interest Rate = r = 10 / 12 %

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A: The future value of ordinary annuity is the group of instalment payment of fixed amount at a certain…

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A: Future value of money is the amount of deposit done and the amount of compounded interest…

Q: A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn…

A: We need to calculate the persent value of annuity  by using this formula.    PV of annuity =CF*…