You win the lottery and are offered the following choices. The appropriate discount rate is 7%. How much is each worth? Which would you choose?   a. $3M today and $3M exactly 3 years from today   b. $2M a year for 4 years, with the first payment starting exactly one year from today c. $350K a year forever, with the first payment starting one year from today

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

A: Solution: When an amount is received each period at a constant growth rate per period, this is known…

Q: You expect to receive $5,000 in 25 years. How much is it worth today if the discount rate is 5.5%?…

A: Present value refers to the current value of an asset that will be present at some future date which…

Q: Suppose you just won the state lottery, and you have a choice between receiving $3,550,000 today or…

A: Choice-1 Amount to receive today is $3,550,000 Choice -2 Annuity amount is $250,000 Time period is…

Q: What is the value today of $1,200 per year, at a discount rate of 9 percent, if the first payment is…

A: The concept of time value of money will be used here. Value today refers to present value. The cash…

Q: In exchange for a RM20,000 payment today, you are allowed to choose one of the alternatives below.…

A: PV = FV / (1 + r / n)nt Where, PV = Present value FV = Future value r = Rate of interest…

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: 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: You won the lottery. You may receive a one-time cash payout today or receive $340,000 in 13 years.…

A: Future Value = fv = $340,000Time = t = 13Discount Rate = r = 12%

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: Suppose you borrow money from your parents for college tuition on January​ 1, 2019. Your parents…

A: The cost of college tuition fees would be equal to the present value of all future payments.

Q: Alex is selling his sailboat and has received an offer öf $5,000 HOw plus an auuitiu $9,000 in 6…

A: Money’s value declines with time, to consider the net actual effect, PV is computed. Discounting is…

Q: The $9.4M lottery that you just won actually pays ($9.4M divided by 40) per year for 40 years. If…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

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: You have been awarded a Pinder Foundation scholarship to help cover your living costs while studying…

A:

Q: You want to buy a home.  You can borrow 95% of the purchase price.  Assuming you can make a down…

A: To calculate the price of home we will use the below  formula   Home price = Down payment/(1-Loan to…

Q: What is the value today of receiving $2,581.00 per year forever? Assume the first payment is made…

A: A perpetuity is a series of fixed payments with no maturity date. In simple words, perpetuity is an…

Q: Price Years Down Payment Rate Payment Interest in 127th Payment AENDETAI $100,000.00 30 20% 4.5%

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: What is the value today of $2,000 per year, at a discount rate of 7 percent, if the first payment is…

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

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: your client wants to buy a new car. the financing terms are: sticker price: 100,000.00 usd cash…

A: Upfront purchase price = $ 100,000 - 21% discount = 79,000Hence, PV = - 79,000Otherwise under…

Q: What is the present value of $170 a year for 3 years discounted back to the present at 3%?

A: Annual payment (P) = $ 170 Number of annual payments (n) = 3 Annual interest rate (r) = 3%

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: You are offered the choice of two payments streams A. $150 paid one year from now, and $150 paid two…

A: In this question we have two parts, in part (A) interest rate is 9% and we need to tell which…

Q: You purchase an old used car from a friend with agreed upon installments that will be paid out over…

A: Today=1400After 1 year=15401000 for 4 years.Interest rate=0.35% monthly

Q: Calculate the present value of a $10000 lottery payment for today, and two annual future payments,…

A: We need to use present value formula given below to calculate present value of future payments…

Q: You have been awarded a Pinder Foundation scholarship to help cover your living costs while studying…

A: The time value of money is a financial concept that is used in the financial analysis of various…

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 intend to endow a scholarship that pays $5,000 every 6 months, starting 6 months from now. If…

A: A series of payments made at an equal interval of time for an infinite period is called perpetuity.…

Q: You have been awarded a Pinder Foundation scholarship to help cover your living costs while studying…

A: Present value of annuity formula is used to calculate the value of lum sum amount of scholarship.…

Q: ime value of money   Your favorite uncle has offered you the choice of the following options. He…

A: Present value means the actual amount is adjusted with the interest rate so as to get the present…

Q: .43% nominal yearly, compounded weekly, how much does this generator cost fam to purchase when…

A: Discount rate:It is the rate used to evaluate the amount of money that will be invested in the…

Q: he $37.7 million lottery payment that you just won actually pays $2.9 million per year for 13 years.…

A: Present value is current value of future cash flow discounted at an appropriate discount rate; in…

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: Suppose you won a lottery 600000 interest of 0.05 percent, they offered you many choices the first…

A: The question gives the following information: Lottery price=600,000Interest rate=0.05%

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: You are offered the following combinations of payments: Čombination A: $3 today, $1.1 one year later…

A: Investments are the methods through which an individual or a company invests money and funds in…

Q: Find the future value, using the future value formula and a calculator. (Round your answer to the…

A: The future value of the cash flow is the future worth of the cash flow at a certain rate of interest…

Q: You have won the lottery. You will receive $5,500,000 today, and then receive 40 payments of…

A: Here, To Find: Total present value of lottery =?

Q: Investment X offers to pay you $5,800 per year for eight years, whereas Investment Y offers to pay…

A: An annuity refers to a stream of fixed cash flows received or paid periodically. The present value…