Present Value of an Annuity On January 1, you win $3,680,000 in the state lottery. The $3,680,000 prize will be paid in equal installments of $460,000 over 8 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 7%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.

Present Value of an Annuity On January 1, you win $3,680,000 in the state lottery. The $3,680,000 prize will be paid in equal installments of $460,000 over 8 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 7%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On January 1, 2018, you deposited $5,500 in a savings account. The account will earn 8 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 7 years? 2. What is the total interest for the 7 years? 3. How much interest revenue did the fund earn in 2018 and in 2019? Show Transcribed Text
Computing the Future Value of an Annuity Stone will deposit $8,250 at the beginning of each year for 10 years in a fund that earns 5%, compounded annually. What is the total amount of the fund at the end of 10 years? Round your answer to the nearest whole number. Do not use a negative sign with your answer. $ Answer
Present Value of an Annuity On January 1, you win $1,900,000 in the state lottery. The $1,900,000 prize will be paid in equal installments of $190,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 7%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.$fill in the blank 1
Monthly payments of $75 are paid into an annuity beginning on January 31, with a yearly interest rate of 9%, compounded monthly. Add the future values of each payment to calculate the total value of the annuity on September 1. On September 1, the value of the annuity will be $_____________?
On January 1, you win $5,000,000 in the state lottery. The $5,000,000 prize will be paid in equal installments of $500,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31 of the current year. If the current interest rate is 6%, determine the present value of your winnings. Use Table 3. Round to the nearest whole dollar.
On January 1 you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. If the current interest rate is 12%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar. Will the present value of your winnings using an interest rate of 12% be more than the present value of your winnings using an interest rate of 5%?
On January 1 you win $3,480,000 in the state lottery. The $3,480,000 prize will be paid in equal installments of $290,000 over 12 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 7%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.
You just won a special lottery which will entitle you to an annual payment $45000 for 10 years, but the first payment won't start until 5 years later (i.e. 1st payment at the end of the 5th year). If you plan to immediately deposit every payment into an annuity product that gives you 5.62% APR with annual compounding, how much is your account balance at the end of the lottery payment plan (i.e. when you receive the last payment)?
Please answer correct step by step Deferred Annuity: An annuity starts at the end of year 3 and runs for 5 years. The payment amount is $1,000. Interest rate is 9%. Compute the present value of the deferred annuity at time 0. Hint: follow the 4 -step process in the PowerPoint lecture. Round to the nearest $1

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