Question

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)

Answer #1

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, 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, 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 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 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 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 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 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 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 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 ?

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