You have just won a lottery that promises an annual payment of $130,000 beginning immediately. You will receive a total of 12 payments. If you can invest the cash flow in an investment that is paying 7% annually, what is the present value of this annuity?

Q: Suppose you just won the state lottery, and you have a choice between receiving $2,825,000 today or…

A: Present value = pv = $2,825,000 Time = nper = 20 years Payment = pmt = $240,000

Q: You have a chance to buy an annuity that pays Php2,500 at the end of each year for 3 years. You…

A: As per the given information: Annual payment = Php2,500Interest rate = 5.5%Period - 3 years To…

Q: Suppose you inherit a perpetuity that pays $4,000 each year. Assuming the first payment will occur…

A: The given rate is APR rate i.e. annual percentage rate. The APR is with daily compounding. The EAR…

Q: To save for a down payment on a home, you invest in an annuity that pays 7.0% annual interest,…

A: The interest earned on the annuity can be calculated with the help of future value of annuity…

Q: After carefully exmaining your budget, you determine you can manage to set aside $350 per year. You…

A: Introduction: Future Value of Annuity Due: Future value: The value of an investment made today, with…

Q: Suppose that you won $1,500,000 in the Illinois state lottery. It will be paid to you over 20 years…

A: An annuity is end of year equal payments made for a fixed period of time at a specified interest…

Q: You have just won the lottery and took a lump sum payout. After talking with a financial adviser you…

A: Present value of $16,000: Present value: $376,205.407024

Q: you just won the state lottery, and you have a choice between receiving $2,625,000 today or a…

A: Rate of return inbuilt in annuity is rate at which present value of annuity is equals to amount of…

Q: The Solvent Insurance Co. will pay you $4,750 a year for 15 years in exchange for $45,000 today.…

A: in this you have to find out present value FACTOR and from that you can get interest rate.

Q: How much would you be willing to pay today for an ordinary annuity that makes equal annual payments…

A: An ordinary annuity is the series of an equal payment that is paid or received at each week, month,…

Q: Suppose you will receive a payment of $80000 in 5 years at a rate of 3% lasting 10 years. Find the…

A: The solution requires the use of formulae applicable in time value of money. They are shown in steps…

Q: You are offered an annuity that will pay $10,000 a year for ten years (that is, ten payments), but…

A: Maximum you should pay for this annuity is $ 45,668/.Explanation:

Q: Roger Baker has accumulated $775,000 in his RRSP and is going to purchase a 20-year annuity from…

A: An Annuity is simply a fixed amount which will be received by Roger Baker at every month-end Present…

Q: You purchase a 10-year annuity that pays you \$ 30000 / v * ear . The first payment will begin in…

A:

Q: What is the future value of a 12%, 10 year annuity due that pays 1,000 each year.

A: The objective of the question is to calculate the future value of an annuity due. An annuity due is…

Q: Jami Minard wants to receive an annuity of $8,000 at the beginning of each year for the next 10…

A: Annuity refers to a contract between an individual and an insurance company under which a desired…

Q: You have Just won the lottery and will receive $490,000 in one year. You will receive payments for…

A: To calculate the present value we will use the below formula   Present value =…

Q: What is the future value of a 6%, 10-year ordinary annuity that pays $200 each year?  If this were…

A: The future value of annuity is calculated using the formula below:

Q: A perpetuity will make its first payment in 20 years. The first payment will be $5,000, and future…

A: Perpetuity means a series of infinite numbers of payments of the same size occurs in an equal…

Q: YOU WIN $500,000 do you want to be paid out all at once or do you want to receive annual end of year…

A: Calculation of Present Value of Annuity Stream:The present value of annuity stream is…

Q: The pipe guy plans to deposit $78,000 into an investment each year for the next 10 years so he can…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: An annuity offers $1,000 for 10 years. If you can earn 12 percent annually on your funds, what is…

A: Annuity Amount = $1,000 Years(n) = 10 Interest Rate(r) = 12% Present Value of Annuity =…

Q: You are saving for a Porsche Carrera Cabriolet, which currently sells for nearly half a million…

A: Present value is the current value of a future amount that is to be received or paid out.     Future…

Q: a) You deposit $200 monthly into an annuity with the goal of accumulating $180,000 after 30 years.…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: You have a chance to buy an annuity that pays Php2,500 at the end of each year for 3 years. You…

A: An annuity is a type of security that pays periodic payments over a specified period of time. In…

Q: Your friend Anne is planning to invest $700 each year for four years and will earn a rate of 6…

A: Given information, Annuity Amount = $700 Time Period = 4 years  Interest rate per year = 6%

Q: What is the future value​ (FV) of this​ perpetuity, given that the interest rate is 3​%?

A: The future value of an investment forecasts the expected value of an investment at a given future…

Q: Assume you are to receive a 5-year annuity with annual payments of £1,000. The first payment will be…

A: The Future Value of an Ordinary Annuity refers to the concept which gives out the compounded or…

Q: The present value of a 4-year annuity is $47,000. The first annual cash flow occurs one year from…

A: The discount rate is 4.8%The present value of the annuity table of discount rate 4.8%.PeriodAnnuity…

Q: You expect to receive a payout from a trust fund in 3 years. The payout will be for $11,000. You…

A: Receipt in 3 years (I) = $11,000 Interest rate (r) = 0.065 Future value (FV) = $19,000 Period for…

Q: You just inherited some money, and a broker offers to sell you an annuity that pays $4,300 at the…

A: Present value of annuity is computed as follows:-PV = A*wherePV= Present value of annuityA= periodic…

Q: Your friend Anne is planning to invest $500 each year for five years and will earn a rate of 5.5…

A: According to the time value of money, the money available in the present is worth more than the same…

Q: You buy an annuity that will pay you $24,000 a year for 25 years.  What is the value of this annuity…

A: Present value of annuity = Annuity amount * PVA of $1

Q: You expect to receive a one-time payment of $1,000 in 10 years and a second payment of $1,500 in 15…

A: Here, One-time payment = $1,000 in 10 years Second payment = $1,500 in 15 years Annual interest rate…

Q: what is the value of the annuity today

A: We can determine the PV of annuity to year 3 and then discount it to year 0 using PV formula. r =…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.