Question

CH6 You just won first place in an origami contest! As your prize, you will receive...

CH6

You just won first place in an origami contest! As your prize, you will receive $1,000 a month for 12 years. If you can earn 6 percent APR on your money, what is this cash flow worth to you today?

Group of answer choices

$102,474.74

$98,414.56

$95,333.33

$101,458.40

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Information provided:

Monthly earning= $1,000

Time= 12 years*12= 144 months

Interest rate= 6%/12= 0.50% per month

The question is solved by calculating the present value.

The present value is calculated by entering the below in a financial calculator:

PMT= 1,000

N= 144

I/Y= 0.50

Press the CPT key and PV to compute the present value.

The value obtained is 102,474.74.

Therefore, the cash flow is worth $102,474.74 today.

In case of any query, kindly comment on the solution.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that you entered a church raffle and won first prize! As your reward, you will...
Suppose that you entered a church raffle and won first prize! As your reward, you will receive a cash payment of $1,000 a month for the next 10 years. Assuming that you can earn 7 percent on your money, what is this prize worth to you today? A.$86,126.35 B.$78,411.06 C.$85,333.33 D.$81,338.40
is the average annual rate of return you earned on your investment? You just won first...
is the average annual rate of return you earned on your investment? You just won first place in a CUNY essay writing contest, and as your prize, you will receive $400 a month each month for the next 7 years (NOT $4,800 per year but $400 per month). If you can earn 8.25% per year on your money, what is the total prize worth to you today? 15. Your oldest child needs a car and you believe you can afford...
Suzie just won the lottery! As her prize, she will receive $2500 a month for the...
Suzie just won the lottery! As her prize, she will receive $2500 a month for the next 10 years. The first payment will be paid today. At 6%, compounded monthly, what is her prize worth today?
Assume that you just won the Open Golf Championship. Your prize can be taken either in...
Assume that you just won the Open Golf Championship. Your prize can be taken either in the form of RM50,000 at the end of each of the next 25 years (That is RM1,000,000 over 25 years) or as a single amount of RM500,000 paid immediately. If you expect to be able to earn 5% annually on your investments over the next 25 years, ignoring taxes and other considerations, which alternative should you take? Why?                                                                                                            You were offered two...
Suppose you have just won the first prize in a lottery. The lottery offers you two...
Suppose you have just won the first prize in a lottery. The lottery offers you two possibilities for receiving your prize. The first possibility is to receive a payment of $16,000 at the end of the year, and then, for the next 10 years this payment will be repeated, but it will grow at a rate of 4%. The interest rate is 12% during the entire period. The second possibility is to receive $100,000 right now. Which of the two...
1. Suppose you have just won the first prize in a lottery. The lottery offers you...
1. Suppose you have just won the first prize in a lottery. The lottery offers you two possibilities for receiving your prize. The first possibility is to receive a payment of $16,000 at the end of the year, and then, for the next 10 years this payment will be repeated, but it will grow at a rate of 4%. The interest rate is 12% during the entire period. The second possibility is to receive $100,000 right now. Which of the...
1.) You just won the $85 million lottery. You will receive $2.6 million a year for...
1.) You just won the $85 million lottery. You will receive $2.6 million a year for the next 30 years plus an additional payment of $7 million at the end of 30 years. The interest rate is 6 percent. How much is your lottery prize worth today? 2.)If you owe $51,000 payable at the end of eight years, what amount should your creditor accept in payment immediately if the interest rate on the loan is 13 percent? 3.) You have...
Today you are just notified that you won a prize that gives you a total of...
Today you are just notified that you won a prize that gives you a total of 8 cash awards of $5,000 each, one every 6 months with the first award being made today. You decide to save each of them in the bank and after the last cash award keep all the money saved until a future date. The bank pays a nominal interest rate of 13% but uses semiannual compounding. How much your account with the bank be if...
Suppose you have just won a lottery. You will receive a total of 27 annual payment,...
Suppose you have just won a lottery. You will receive a total of 27 annual payment, and each payment is $3,371. You will receive the first payment today. If you can earn 6% annual rate of return each year, how much is this lottery worth to you today? (round to the nearest dollar. ) PLEASE INCLUDE EXCEL FORMULA
You have just won the lottery. You will receive $2,000,000 today and then receive 40 payments...
You have just won the lottery. You will receive $2,000,000 today and then receive 40 payments of $750,000. These payments will start one year from now and will be paid every six months. A representative from TheExpert Investment has offered to purchase all the payments from you for $17 million. The appropriate discount rate is 9 percent APR compounded daily. Assume there are 12 months in a year, each with 30 days. a)What is the effective six month rate? Show...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT