Question

You inherit $418,000. You can receive the $418,000 in one lump sum payment today or, alternatively,...

You inherit $418,000. You can receive the $418,000 in one lump sum payment today or, alternatively, receive two amounts: $218,000 in 8 months and $220,000 in 21 months from today. If you can earn 7.6% per annum compounding monthly on your monies, what is the value of the option to receive two payments (in present-day value)? (to nearest whole dollar,; don’t use $ sign or commas)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

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
You inherit $402,000. You can receive the $402,000 in one lump sum payment today or, alternatively,...
You inherit $402,000. You can receive the $402,000 in one lump sum payment today or, alternatively, receive two amounts: $202,000 in 8 months and $220,000 in 21 months from today. If you can earn 13.1% per annum compounding monthly on your monies, what is the value of the option to receive two payments (in present day value)? (to nearest whole dollar,; don’t use $ sign or commas)
You inherit $527,000. You can receive the $527,000 in one lump sum payment today or, alternatively,...
You inherit $527,000. You can receive the $527,000 in one lump sum payment today or, alternatively, receive two amounts: $327,000 in 7 months and $220,000 in 21 months from today. If you can earn 5.5% per annum compounding monthly on your monies, what is the value of the option to receive two payments
You inherit $545,000. You can receive the $545,000 in one lump sum payment today or, alternatively,...
You inherit $545,000. You can receive the $545,000 in one lump sum payment today or, alternatively, receive two amounts: $345,000 in 10 months and $220,000 in 21 months from today. If you can earn 11.6% per annum compounding monthly on your monies, what is the value of the option to receive two payments (in present day value)?
Suppose you will receive $17,000 in 7 months and another $11,000 in 21 months. If the...
Suppose you will receive $17,000 in 7 months and another $11,000 in 21 months. If the discount rate is 7% per annum (compounding monthly) for the first 10 months, and 14% per annum (compounding monthly) for the next 11 months, what single amount received today would be equal to the two proposed payments? (answer to the nearest whole dollar; don’t include the $ sign or commas)
Suppose you will receive $19,000 in 7 months and another $13,000 in 22 months. If the...
Suppose you will receive $19,000 in 7 months and another $13,000 in 22 months. If the discount rate is 5% per annum (compounding monthly) for the first 10 months, and 10% per annum (compounding monthly) for the next 12 months, what single amount received today would be equal to the two proposed payments? (answer to the nearest whole dollar; don’t include the $ sign or commas)
1.Suppose you will receive $14,000 in 10 months and another $8,000 in 22 months. If the...
1.Suppose you will receive $14,000 in 10 months and another $8,000 in 22 months. If the discount rate is 5% per annum (compounding monthly) for the first 13 months, and 10% per annum (compounding monthly) for the next 9 months, what single amount received today would be equal to the two proposed payments? (answer to the nearest whole dollar; don’t include the $ sign or commas) 2. Jill wants to buy a car but needs to calculate how much she...
You have an investment from which you can receive your return in one of the following...
You have an investment from which you can receive your return in one of the following ways: Option A: An annuity with payments of $100,000 each for the next ten years, with the first payment commencing today. Option B: A lump-sum one-time payment of $1,005,757 after five years. The interest rate is 6%, compounded annually. Which option has the greater present value? Option B. Both options have the same present value. Option A.
You are to receive a sum of money, but you can choose one of two scenarios....
You are to receive a sum of money, but you can choose one of two scenarios. You can either receive $40,000 today, or receive $56,000 after 10 years at an interest rate of 13% per year compounded annually. Which of the two scenarios would you choose and why?
A. A contract features a lump-sum future flow of $46,000 three years from today. If you...
A. A contract features a lump-sum future flow of $46,000 three years from today. If you can now purchase that flow for $42,201.84, then what annual implied return would you earn on this contract? B. An annuity contract will make 8 annual payments and the first payment occurs exactly a year from today. If the annuity has a 9.2% rate and a current PV or price of $308.98, then what must be the size of its annual payments? C. An...
Question 1 : Your uncle offers to sell you his vintage Rolls Royce. He suggests a...
Question 1 : Your uncle offers to sell you his vintage Rolls Royce. He suggests a payment plan where you pay just $13,000 today, $7100 in 12 months and $69,000 in exactly 20 months from today. If the interest rate is 12.8% per annum compounding monthly, what is the value of the offer (in present day dollars, rounded to the nearest dollar; don’t show $ sign or commas)? is there anything not clear ?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT