Kristina just won the lottery, and she must choose among three award options. She can elect to receive a lump sum today of $62 million, to receive 10 end-of-year payments of $9.4 million, or to receive 30 end-of-year payments of $5.4 million. If she thinks she can earn 7% percent annually, which should she choose? If she expects to earn 8% annually, which is the best choice? If she expects to earn 9%'   ( explain well with important point ).

Q: eremiah Wood wants to set up a fund to pay for his daughter's education. In order to pay her…

A: Amount needed in 4 years (CF1) = $25,000 Amount needed in 5 years (CF2) = $26900 Amount needed in 6…

Q: Gail has won a lottery that pays her $100,000 at the end of this year and increases by 15 percent…

A: We are given the following information -Lottery payment$100,000Increase in lottery payment15%No. of…

Q: Ora (43) and wants to know about saving for her superannuation when she plans to retire at age 60.…

A: The retirement plan refers to the arrangement of the funds for the time after retirement. The time…

Q: Kirk Van​ Houten, who has been married for 21 years, would like to buy his wife an expensive diamond…

A: The annual rate of return refers to the compounded rate of return earned on the principal amount…

Q: Daniel knows that he can withdraw up to a maximum of $35,000 from his Registered Retirement Savings…

A: The minimum repayment amount is determined on the basis or proportion of actual withdrawal that is…

Q: Daniel has just won the Flyball Lottery. Ha has tvo options for recsiving his prize. The first…

A: Answer a) Calculation of Present value if amount can be reinvested at 10% Option -1 Since the amount…

Q: Julie has just retired. Her company's retirement program has two options as to how retirement…

A: Solution 1a: Present value of first option = Lump sum immediate payment = $158,000 Present value of…

Q: John wants to have $200,000 to send his brother to school. He sets up a 529 plan and wants to know…

A: The concept of time value of money will be used here. Note that 529 plans are college savings plan…

Q: Several years ago John bought an endowment insurance policy that is about to mature. He has the…

A: given data   option 1 gives $20000 now  option 2 gives $40000 in 10 years  for option 2 we will…

Q: Jeremiah Wood wants to set up a fund to pay for his daughter's education. In order to pay her…

A: The lump sum payment today is calculated using the following present value equationWhere, CFi is the…

Q: Shelley wants to cash in her winning lottery ticket. She can either receive twelve, $199,000…

A: Cash flow = $199000Rate = 6% annually= 3% semi-annualTime period= 12-1=11

Q: Natalie won the lottery and is deciding between the options of receiving the annual payment option…

A: Present Value of annuity due formula will be used for the calculation of present value as the…

Q: Bill O’Brien would like to take his wife, Mary, on a trip three years from now to Europe to…

A: Future value:

Q: sabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000…

A: Here we will use formula of future value of money to calculate amount after 10 years :   FV = PV × 1…

Q: Question 1 What would be the better outcome, renting or buying and by how much? (Show your work and…

A: Pierre is deciding on whether he should buy a house or rent it. If rented the expense will be $1500…

Q: Erin wants a monthly retirement income of $10,000. She will retire on her birthday at age 67 with a…

A: Retirement: It represents when an individual leaves the firm's workforce. The present value of the…

Q: Bernie Long wants to retire to California when she is 60 years of age. Bernie is now 40. She…

A: The present value means the value of the investment from a future date. It is the amount that is…

Q: An individual is considering contributing $4,000 per year to either a traditional or a Roth IRA.…

A: Roth IRA:A Roth IRA is a retirement account that allows individuals to contribute after-tax income,…

Q: Brenda Young desires to have $16,500 eight years from now for her daughter’s college fund. If she…

A: Data given: FV= $16500 n=8 years r=12% (compounded annually) Required: what amount should she…

Q: Jane won the $70 million lottery. She is to receive $1 million a year for the next 50 years…

A: The present value of any cash flow/series of cash flows can be determined by following a process…

Q: Mary wants to buy a mountain cabin for her retirement. Mary recer cabin she wants will cost $40,000…

A: Let  Investment amount be x.40000=x1+61003Simplify both side of equations .40000=148877125000x=…

Q: Mark is choosing between two colleges. Graduates of college A expect to earn $60,000 upon graduation…

A:

Q: Kayla wants to have $100,000 saved when she graduates. She plans to graduate in 6 years and believes…

A: Option a: This option is correct. Let's prove it:As per Kayla the amount she shall invest today is…

Q: Maya just win the lottery! She could either receive $75,000 today or $1,000,000 in 40 years. At what…

A: The concept of time value of money will be used and applied here.As per the concept of time value of…

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*…

Q: Johnny and June would like to begin saving for their children's college education. They have four…

A: The future cash flows are: In year 0-3 = $0In year 4-6 = $22,000In year  7 = $44,000In year 8-10 =…

Q: Megan is applying for a scholarship currently valued at $4,000 at the end of first year. If she is…

A: Data given: Value of scholarship at the end of first year= $4000 Rate of inflation=2%

Q: Cyrus Petit is planning for the day when his child Laura, will go to college. Laura has just turned…

A: Given:

Q: abe and Sarah would like to begin saving for their children's college education. They would like to…

A: Inflation shows how much there is an increase in the prices of goods and services and inflation…

Q: Megan is already looking ahead to graduation and a job, and she wants to buy a new car not long…

A: The future value (FV) of an annuity is the amount that a series of equal payments or receipts will…

Q: Jan wants to plan for her daughter's education. Her daughter, Rachel was born today and will go to…

A: First, we need to calculate the future value of the tuition fees. The tuition fee is currently…

Q: When Joe graduated from college at age 22, his grandparents established a trust fund and endowed it…

A: Future value is the value of annuity at the end of a defined period. This can be calculated by…

Q: lex wants to provide funding in the event of his death for his daughter Ellie, age 8, to attend four…

A: There is a need for financial planning for future requirements and if done can produce good results…

Q: son, age 14, was given a choice of $60,000 to be deposited ould fund 80% of lump sum cost of 4 years…

A: Value of money changes with time and value of money would not be same over the period due to the…

Q: Isabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000…

A: The future value function can be used for determining the future value of a present sum, or the…

Q: calculate the amount of money she would have to invest in equal annual amounts to achieve her…

A: The future value of an investment is the expected value of money that will be received after a…

Q: Frank is planning for the day when his child, Laura, will go to college. Laurahas just turned eight…

A: The question is based on the calculation concept of future value and present value of fund in form…