Question

How much is an electronic lottery prize worth today that would be paying you $ 45,000...

How much is an electronic lottery prize worth today that would be paying you $ 45,000 per year for the next 20 years if the discount rate is 4.0% (Note: taxes have already been deducted from the annuity)?

a)$ 611,565

b)$ 936,000

c)$ 565,346

d)$ 450,565

e)$ 900,000

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
Congratulations! You have just won the State Lottery. The lottery prize was advertised as an annuitized...
Congratulations! You have just won the State Lottery. The lottery prize was advertised as an annuitized $105 million paid out in 30 equal annual payments beginning immediately. The annual payment is determined by dividing the advertised prize by the number of payments. You now have up to 60 days to determine whether to take the cash prize or the annuity. a. If you were to choose the annuitized prize, how much would you receive each year? b. The cash prize...
You just won a $1 million lottery today, and the rule of the lottery is to...
You just won a $1 million lottery today, and the rule of the lottery is to pay you $40,000 per year for the next 10 years, followed by $60,000 per year for the following 10 years. The first payment starts one year from now. You estimated the appropriate interest rate is 10% pa, what is the winnings worth today?
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...
Show steps Congratulations! You have just won $20 million lottery. You will be paid $1 million...
Show steps Congratulations! You have just won $20 million lottery. You will be paid $1 million a       year for the next 20 years – and you receive your first check today. Ignoring, for the       moment, the taxes you’ll have to pay, what are your winnings really worth today?             Assume an 7% discount rate.  
The North Carolina Lottery Commission has just informed you that you have won a valuable prize!...
The North Carolina Lottery Commission has just informed you that you have won a valuable prize! The amount is to be paid out at the rate of $70,000 a year for the next 20 years.    With a discount rate of 13 percent, what is the present value of your winnings?  (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Your client just won the lottery and has the option of receiving $1 million today or...
Your client just won the lottery and has the option of receiving $1 million today or $100,000 per year for 20 years. What is your recommendation assuming a 9% discount rate? What is your recommendation assuming a 7% discount rate? Choose one answer. Take the $1 million payout if the discount rate is 9%; take the annuity payout if 7% is the discount rate Take the $100,000 annuity payout in either discount rate scenario Take the $1 million payout in...
How much would you have to invest today in the bank at an interest rate of...
How much would you have to invest today in the bank at an interest rate of 8% to have an annuity of 7,000 per year for 8 years, with nothing left in the bank at the end of the 8 years? Select the amount below that is closest to your answer. Ignore income taxes) Use the selections from the present value tables below! Present Value of $1 Period % 8\% 4 0.855 0.681 8 0.540 16 0534 0.292 Present Value...
How much would you have to invest today in the bank at an interest rate of...
How much would you have to invest today in the bank at an interest rate of 8% to have an annuity of 7,000 per year for 8 years, with nothing left in the bank at the end of the 8 years? Select the amount below that is closest to your answer. Ignore income taxes) Use the selections from the present value tables below! Present Value of $1 Period % 8\% 4 0.855 0.681 8 0.540 16 0534 0.292 Present Value...
How much would you be willing to pay today for an ordinary annuity that makes equal...
How much would you be willing to pay today for an ordinary annuity that makes equal annual payments of $3,000 each year. You will receive your first payment 7 years from today and you will receive your last payment 32 years from today. The interest rate on this annuity is 4.1%
You have just matched all of the numbers in the Mega Zillions lottery. The Jackpot was...
You have just matched all of the numbers in the Mega Zillions lottery. The Jackpot was $62,000,000. Your choices are to take your prize in equal annual installments over the next 30 years, or to receive an immediate check for $20,000,000. Assuming a discount rate of 9.7%, and ignoring the effect of taxes, which option is financially optimal? A. Installments B. Immediate check C. The two options are worth exactly the same amount D. Insufficient data to make a determination
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT