st won a lottery prize of $1,000,000 collectable in 10 yearly installments of $100,000 starting today. The total present worth of the prize is $665,270. Suppose that you have a large mortgage you want to out equivalent payment scheme. You would like $420,000 today and the balance of the prize in four years when you intend to purchase a large piece of waterfront property. How much will the payment b rest is 10 percent, compounded monthly. nt in four years will be $

st won a lottery prize of $1,000,000 collectable in 10 yearly installments of $100,000 starting today. The total present worth of the prize is $665,270. Suppose that you have a large mortgage you want to out equivalent payment scheme. You would like $420,000 today and the balance of the prize in four years when you intend to purchase a large piece of waterfront property. How much will the payment b rest is 10 percent, compounded monthly. nt in four years will be $

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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Please do the following questions with full working
Assume you win a lottery, and you are offered the following stream of payments by the lottery commission: $25,000 today, $32,000 one year from now, another $32,000 two years from now, and a final payment of $55,000 three years from now. You accept the offer. If you invest all of these proceeds at 6% compounded annually and extract nothing from the investment, how much will you have at the end of the fourth year? Excel Formula Please
Assume you won a worldwide lottery that pays $1.55 million in year 0, $5 million in year 1, and $200,000 in years 5 through 100. Assuming that 100 years is as “long” as infinity, calculate the perpetual equivalent annual worth for years 1 through infinity at an interest rate of 10% per year. (Enter your answer in dollars and not in millions.) The perpetual equivalent annual worth for years 1 through infinity is $ .
A state lottery commission pays the winner of the “Million Dollar” lottery annual installments of $50000 each year for the next ten years. If the prevailing interest rate is 8%/year compounded continuously, will the winner get his million dollars? If no, what should be the size of annual installment for overall win be equal one million?
Suppose a state lottery prize of $8 million is to be paid in 5 payments of $1,600,000 each at theend of each of the next 5 years. If money is worth 12%, compounded annually, what is the presentvalue of the prize? (Round your answer to the nearest cent.)
A builder is offering $139,371 loans for his properties at 9 percent for 25 years. Monthly payments are based on current market rates of 9.5 percent and are to be fully amortized over 25 years. The property would normally sell for $150,000 without any special financing. Required: a. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buyer would have Give typing answer with explanation and conclusion
The Potters want to buy a small cottage costing $120,000 with annual insurance and taxes of $740 and $2200, respectively. They have saved $15,000 for a down payment, and they can get a 6%, 25-year mortgage from a bank. They are qualified for a home loan as long as the total monthly payment does not exceed $1000. Are they qualified? Click the icon to view the Real Estate Amortization Table Select the correct choice below and fill in the answer box to complete your choice. (Round to the nearest cent as needed.) OA. No, because the total monthly payment is $ OB. Yes, because the total monthly payment is $ Submit test 0 ma on mo CHE Op ADD Ques
You have just won the lottery and will receive $520,000 in one year. You will receive payments for 26 years, and the payments will increase 4 percent per year. If the appropriate discount rate is 12 percent, what is the present value of your winnings?
Suppose a state lottery prize of $3 million is to be paid in 5 payments of $600,000 each at the end of each of the next 5 years. If money is worth 12%, compounded annually, what is the present value of the prize? (Round your answer to the nearest cent.)
Assume you won a million dollars in the Texas Lottery. You have two options: 1) collect S426,000 now or 2) receive $50,000 a year (end-of-year) for the next 20 years. Which option would you opt for assuming a 10% interest rate? Use an Excel formula to justify your choice.
The problem describes a debt to be amortized. (Round your answers to the nearest cent.)A man buys a house for $330,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 9 years. The interest rate on the debt is 10%, compounded semiannually. (a) Find the size of each payment.$ (b) Find the total amount paid for the purchase.$ (c) Find the total interest paid over the life of the loan.$

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