The gaming commission is introducing a new lottery game called Infinite Progresso. The winner of the Infinite Progresso jackpot will receive $700 at the end of January, $1,800 at the end of February, $2,900 at the end of March, and so on up to $12,800 at the end of December. At the beginning of the next year, the sequence repeats starting at $700 in January and ending at $12,800 in December. This annual sequence of payments repeats indefinitely. If the gaming commission expects to sell a minimum of 800,000 tickets, what is the minimum price they can charge for the tickets to break even, assuming the commission earns 6.00 %/year/month on its investments and there is exactly one winning ticket? $ Do all calculations to 5 decimal places and round final answer to 2 decimal places. Tolerance is ±$0.03.

The gaming commission is introducing a new lottery game called Infinite Progresso. The winner of the Infinite Progresso jackpot will receive $700 at the end of January, $1,800 at the end of February, $2,900 at the end of March, and so on up to $12,800 at the end of December. At the beginning of the next year, the sequence repeats starting at $700 in January and ending at $12,800 in December. This annual sequence of payments repeats indefinitely. If the gaming commission expects to sell a minimum of 800,000 tickets, what is the minimum price they can charge for the tickets to break even, assuming the commission earns 6.00 %/year/month on its investments and there is exactly one winning ticket? $ Do all calculations to 5 decimal places and round final answer to 2 decimal places. Tolerance is ±$0.03.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, you win $46,000,000 in the state lottery. The $46,000,000 prize will be paid in equal installments of $5,750,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 5%. Determine the present value of your winnings. Round your answer to the nearest dollar. $ fill in the blank 2
A $3.6 million state lottery pays $15,000 at the beginning of each month for 20 years. How much money must the state actually have in hand to set up the payments for this prize if money is worth 5.3%, compounded monthly?
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 $ .
Keeler's Fabrication sets aside $3500.00 at the beginning of every six months in a fund to replace equipment. If interest is 12% compounded monthly, how much will be in the fund after 3 years? The fund will be worth $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Winners of the Dream a Dream Lotto draw are given the choice of receiving the winning amount divided equally over 22 years or as a lump sum cash option amount. The cash option amount is determined by discounting the winning amount at 9 percent interest compounded quarterly over 22 years. This week the lottery is worth $18 million to a single winner.
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.
The gaming commission is introducing a new lottery game called Infinite Progresso. The winner of the Infinite Progresso jackpot will receive $800 at the end of January, $2,300 at the end of February, $3,800 at the end of March, and so on up to $17,300 at the end of December. At the beginning of the next year, the sequence repeats starting at $800 in January and ending at $17,300 in December. This annual sequence of payments repeats indefinitely. If the gaming commission expects to sell a minimum of 1,200,000 tickets, what is the minimum price they can charge for the tickets to break even, assuming the commission earns 9.00 %/year on its investments and there is exactly one winning ticket? $ Do all calculations to 5 decimal places and round final answer to 2 decimal places. Tolerance is ±$0.03.
I ....-I MY NOTES ASK YOUR TEACHER A state lottery commission pays the winner of the Million Dollar lottery 40 installments of $25,000/year. The commission makes the first payment of $25,000 immediately and the other n = 39 payments at the end of each of the next 39 years. Assume that the balance on deposit with the bank earns interest at the rate of 4%/year compounded yearly. Determine the present value (in dollars) of the 39 future payments. (Round your answer to the nearest cent.) 24 Determine how much money (in dollars) the commission should have in the bank initially to guarantee the payments. (Round your answer to the nearest cent.) 24 MY NOTES ASK YOUR TEACHER The Martinezes are planning to refinance their home. The outstanding balance on their original loan is $125,000. Their finance company has offered them two options. (Assume there are no additional finance charges. Round your answers to the nearest cent.) Option A: A fixed-rate mortgage at an interest rate of 3.5%/year…
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 have just received notification that you have won the $2.05 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 75 years from now. What is the present value of your windfall if the appropriate discount rate is 10 percent? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. Present value