You win a 1.8 million dollar lottery prize. You have a choice between recieving the winnings through regular payments over 20 years or recieving a lump sum amount equal to the present value of the prize, calculated with an annual interest rate of 4.4 %. Consider the decision by answering the questions below. Round all answers to the two decimal places (the nearest cent). (a) If you receive the winnings through equal payments (at the end of the year) for 20 years, how much would each payment be? Payment amount: $ (b) If you opt to recieve the present value of the winnings, how much would you receive?

Q: c) A person invests ugx.200,000 at an interest rate of 10% compounding annually. He receives ugx…

A: Present value shows the amount that is presently worth. It is calculated by using number of periods,…

Q: An insurance settlement of $1.5 million must replace Trixie Eden's income for the next 35 years.…

A: Present value (PV) = $1,500,000 Interest rate = 7.5% Monthly interest rate (r) = 7.5%/12 = 0.625%…

Q: You have just won the Super Duper Lotto. Although the prize is advertised as $40 million, you…

A: The question gives the following information:

Q: You have just won the Multi-State Lottery. You have the option of receiving a check for $35,000,000…

A: The objective of this question is to determine the interest rate that the lottery commission is…

Q: Assume that you contribute $150 per month to a retirement plan for 20 years. Then you can increase…

A: Future value refers to the value an investment or cash flow is expected to grow to at a specific…

Q: Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round…

A: Computation:

Q: Your aunt offers you a choice of $20,200 in 20 years or $750 today. Use Appendix B as an approximate…

A: NPV ( Net present value ) mainly helps in finding out the current total value of the project for the…

Q: When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be…

A: Annuity is the no. of payments which are equal in size and made in equal interval of time. Person…

Q: what should she pay for this investment today?

A: SOLUTION:- Future value = $990 (FV) number of years = 2 (n) interest rate = 8.10% (r) Today…

Q: erve three decimal places for non-terminating decimal values. Draw the cashflow diagram for each…

A: In insurance there are periodic payments made for the insurance some payments goes for investment…

Q: Find the future values of these ordinary annuities. Compounding occurs once a year. Round your…

A: Formulas:

Q: Your uncle offers you a choice of $103,000 in 10 years or $35,000 today. Use Appendix B as an…

A: NPV ( Net present value ) helps organizations for finding out the time value of money. It calculates…

Q: Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round…

A: Future value is the estimated value of current assets that is discounted at an assumed rate of…

Q: I recently found a real-life advertisement in the newspaper. (Only the phone number has been…

A: Lottery amount = $10,000,000 Annual payment (P) = 10,000,000/20 = $500,000 Number of annual payments…

Q: An inheritance provides you with a $52,000 per year payment for the next 40 years. A 6.00% discount…

A: a) Present value annuity (PV) of an inheritance payment (P) of $52,000 for a period (n) of 40 years…

Q: How much money would you have to deposit today in order to have $5,000 in three years if the…

A: Present Value = Future Value / ( 1 + discount rate )years

Q: Derek has the opportunity to buy a money machine today. The money machine will pay Derek $35,200.00…

A: The time value of money concept will be used and applied here. As per the time value of money…

Q: 2) Fund X earns i(12) = 6% interest, while Fund Y earns i(12) = 3% interest (and both start off with…

A: in this problem you have to calculate monthly interest and calculate future value of that.

Q: I recently found a real-life advertisement in the newspaper. (Only the phone number has been…

A: Step 1:Given :The lottery prize is paid in 20 annual installments.The interest rate is 5% . To…

Q: You won the lottery. You could receive $100,000 a year for the next 10 years or a lump sum today.…

A: An ordinary annuity is a series of payments made at the end of a period with equal intervals. The…

Q: Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round…

A: Calculation of future values of ordinary annuities and annuities due: Answer: Future value of…

Q: You have just won the lottery and will receive a lump sum payment of $23.49 million after taxes.…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: Solve: 3. Felix Jones, a recent engineering graduate, expects a starting salary of $35,000 per year.…

A: Salary in year 1 (S1) = $35000 Growth in salary (g) = 5% r = 5% n = 5 years

Q: You choose to invest your $3,435 income tax refund check (rather than spend it) in an account…

A: Investment (PV) = $3,435 Interest rate (r) = 6% Period (t) = 30 Years

Q: You won a $2,000,000 lottery that pays out $125548 every year for 11 years. If the lottery makes the…

A: True value of prize means present value of all payments made for 11 years which is called annuity.…

Q: und X earns i(12) = 6% interest, while Fund Y earns i(12) = 3% interest (and both start off with no…

A: The future value is the future worth of the amount that will be paid or received at future.

Q: An executive prepares for retirement by depositing $2500 into an annuity each year for 10 years. The…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: Consider an inheritance that pays the beneficiary an annuity of $750 that begins immediately (an…

A: Annuity = a = $750Number of Payment = n = 20Interest Rate = r = 3%Annuity for year 14 = $0Payment…

Q: What discount rate would make you indifferent between receiving $3,515.00 per year forever and…

A: The present value of perpetuity can be calculated by The present value of annuity can be calculated…

Q: Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round…

A: Ordinary Annuity:   $300 per year for 16 years at 16%: $18,069.17   $150 per year for 8 years at 8%:…

Q: Carrie Tune will receive $27750 for the next 5 years as a payment for a new song she has written.…

A: Present Value Interest Factor of an Annuity is a factor used to calculate the present value of a…

Q: Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round…

A: Annuities$500$250$1,000Interest rate8%4%0%Number of years8 years4 years4 years

Q: You have received $200,000 from the PowerBall Lottery and want to have half that amount available…

A: Total lottary amount = $200,000 Amount required at retirement (FV) = $200,000/2 = $100,000 Interest…

Q: Your aunt offers you a choice of $21,200 in 20 years or $670 today. Use Appendix B as an approximate…

A: TVM concept will be used here.   TVM means time value of money.

Q: onsider an inheritance that pays the beneficiary an annuity of $500 that begins immediately (an…

A: In annuity due there are payments at the beginning of period so there one period extra interest in…

Q: You have just received notification that you have won the $1.03 million first prize in Lamarche…

A: The time value of money is a financial concept that is used to value and measure the worth of a sum…

Q: $62,234. How much will your payment be, per month, if the dealer gives you a 3.1% nominal interest…

A: EMI means Equated Monthly Installment. It is a predetermined amount a borrower pays to a lender at a…

Q: You have just won the Super Duper Lotto. Although the prize is advertised as $30 million, you…

A: The present value of winning is calculated as present value of all cash flows.

Q: The amount a person would need to deposit today with a 5 percent interest rate to have $2,500 in…

A: Given: Years = 3 Interest rate = 5% Future value = 2,500

Q: Your uncle offers you a choice of $106,000 in 10 years or $43,000 today. Use Appendix B as an…

A: The concept of TVM states that the money earned earlier is worth more because the money earns…