You have just won a lottery prize of $3.000,000 collectable in 10 yearly installments of $300,000 starting today. The total present worth of the prize is $1,995,810. Suppose that you have a large mortgage you want to pay off now. You propose an alternative but equivalent payment scheme. You would like $300,000 today and the balance of the prize in seven years when you intend to purchase a large piece of waterfront property. How much will the payment be in seven years? Assume that annual interest is 10 percent, compounded monthly. The payment in seven years will be $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.)

You have just won a lottery prize of $3.000,000 collectable in 10 yearly installments of $300,000 starting today. The total present worth of the prize is $1,995,810. Suppose that you have a large mortgage you want to pay off now. You propose an alternative but equivalent payment scheme. You would like $300,000 today and the balance of the prize in seven years when you intend to purchase a large piece of waterfront property. How much will the payment be in seven years? Assume that annual interest is 10 percent, compounded monthly. The payment in seven years will be $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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