You have won the lottery. You will receive $5,500,000 today, and then receive 40 payments of $1,900,000. These payments will start one year from now and will be paid every six months. A representative from Greenleaf Investments has offered to purchase all the payments from you for $35 million. If the appropriate discount rate is an APR of 9 percent compounded daily, should you take the offer? Assume there are 12 months in a year, each with 30 days.
You have won the lottery. You will receive $5,500,000 today, and then receive 40 payments of $1,900,000. These payments will start one year from now and will be paid every six months. A representative from Greenleaf Investments has offered to purchase all the payments from you for $35 million. If the appropriate discount rate is an APR of 9 percent compounded daily, should you take the offer? Assume there are 12 months in a year, each with 30 days.
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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