You win at a lottery that pays you $1000 a week for life! (a) Assuming that a year counts 365.25 days on average and that a week counts 7 days, find the annual income. (b) You decide to open a savings account with a 3% yearly interest rate compounded continuously and put all the money from your prize in this until you can buy a $300000 Lamborghini. For how long will you save? (c) What is the capital value of the prize, assuming the same 3% interest rate?
You win at a lottery that pays you $1000 a week for life! (a) Assuming that a year counts 365.25 days on average and that a week counts 7 days, find the annual income. (b) You decide to open a savings account with a 3% yearly interest rate compounded continuously and put all the money from your prize in this until you can buy a $300000 Lamborghini. For how long will you save? (c) What is the capital value of the prize, assuming the same 3% interest rate?
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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You win at a lottery that pays you $1000 a week for life!
(a) Assuming that a year counts 365.25 days on average and that a week counts 7 days, find the annual income.
(b) You decide to open a savings account with a 3% yearly interest rate compounded continuously and put all the money from your prize in this until you can buy a $300000 Lamborghini. For how long will you save?
(c) What is the capital value of the prize, assuming the same 3% interest rate?
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