Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving...
Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving a total of $1,400,000 now, or she can elect to be paid $110,000 at the end of each of the next 25 years. If Gabrielle can earn 5% annually on her investments, from a strict economic point of view which option should she take? If Gabrielle takes the prize as an annuity, the present value of the 30-year ordinary annuity is $ . (Round to the nearest dollar.)
Homework Answers
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
=$110,000[1-(1.05)^-25]/0.05
=$110,000*14.09394457
=$1,550,334(Approx).
Hence $110,000 at the end of each of the next 25 years is a better option.
Add Answer to:
Gabrielle just won $2.75 million in the state lottery. She is
given the option of receiving...
Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving...
Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving a total of $1,400,000 now, or she can elect to be paid $110,000 at the end of each of the next 25 years. If Gabrielle can earn 65% annually on her investments, from a strict economic point of view which option should she take? If Gabrielle takes the prize as an annuity, the present value of the 30-year ordinary annuity is $ . (Round...
Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving...
Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving a total of $1,400,000 now, or she can elect to be paid $110,000 at the end of each of the next 25 years. If Gabrielle can earn 5% annually on her investments, from a strict economic point of view which option should she take?
Gabrielle just won $3 million in the state lottery. She is given the option of receiving...
Gabrielle just won $3 million in the state lottery. She is given the option of receiving a of $1,400,000 now, or she can elect to receive $120,000 at the end of each of the next 25 years. If Gabrielle can earn 6% annually on her investments, which option should she take? If Gabrielle takes the prize as an annuity, the present value of the 25-year ordinary annuity is $ (Round to the nearest dollar.)
2. Gabrielle just won $1.8 million in the state lottery. She is given the option of...
2. Gabrielle just won $1.8 million in the state lottery. She is given the option of receiving a total of S900,000 now, or she can elect to be paid $90,000 at the end of each of the next 20 years. If Gabrielle can earn 6% annually on her investments, from a strict economic point of view which option should she take? If Gabrielle takes the prize as an annuity, the present value of the 20-year ordinary annuity is S Round...
Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a total of $1.3 million now,...
Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a total of $1.3 million now, or she can elect to be paid $100,000 at the end of each of the next 25 years. If Gabrielle can earn 5% annually on her investments, from a strict economic point of view which option should she take and what formula to use?
Juan just won $2.5 million in the state lottery. He is given the option of receiving...
Juan just won $2.5 million in the state lottery. He is given the option of receiving a total of $1.3 million now, or he can elect to be paid $100,000 at the end of each of the next 25 years. If Juan can earn 5% annually on his investments, from a strict economic point of view, which option should he take? Explain why.
Juan just won $2.5 million in the state lottery. He is given the option of receiving...
Juan just won $2.5 million in the state lottery. He is given the option of receiving a total of $1.3 million now, or he can elect to be paid $100,000 at the end of each of the next 25 years. If Juan can earn 5% annually on his investments, from a strict economic point of view, which option should he take? Explain why.
You and 11 coworkers just won $14 million ($1,166,666.67 each) from the state lottery. Assuming you...
You and 11 coworkers just won $14 million ($1,166,666.67 each) from the state lottery. Assuming you each receive your share over 17 years and that the state lottery earns a 9 percent return on its funds, what is the present value of your prize before taxes if you request the 'up-front cash' option? (Note: Also assume an ordinary annuity-payments made at the end of each period.) Click on the table icon to view the annuity table ? The present value...
ONOFF Chap 5 Problems Due Friday by 11:59pm Points 15 Submitting a text entry box or...
ONOFF Chap 5 Problems Due Friday by 11:59pm Points 15 Submitting a text entry box or a file upload Use the examples provided here to work on the following problems (make sure you show all your work) Problem 1: Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving a total of $1,400,000 now, or she can elect to be paid $110.000 at the end of each of the next 25 years. If Gabrielle...
You and 11 coworkers just won $18 million ($1,500,000.00 each) from the state lottery. Assuming you...
You and 11 coworkers just won $18 million ($1,500,000.00 each) from the state lottery. Assuming you each receive your share over 16 years and that the state lottery earns a 9 percent return on its funds, what is the present value of your prize before taxes if you request the up front cash option? (note: assume an ordinary annuity-- payment made at the end of each period) The present value of your prize before taxes if you request the up...
Gabrielle just won $3 million in the state lottery. She is given the option of receiving a of $1,400,000 now, or she can elect to receive $120,000 at the end of each of the next 25 years. If Gabrielle can earn 6% annually on her investments, which option should she take? If Gabrielle takes the prize as an annuity, the present value of the 25-year ordinary annuity is $ (Round to the nearest dollar.)
2. Gabrielle just won $1.8 million in the state lottery. She is given the option of receiving a total of S900,000 now, or she can elect to be paid $90,000 at the end of each of the next 20 years. If Gabrielle can earn 6% annually on her investments, from a strict economic point of view which option should she take? If Gabrielle takes the prize as an annuity, the present value of the 20-year ordinary annuity is S Round...
You and 11 coworkers just won $14 million ($1,166,666.67 each) from the state lottery. Assuming you each receive your share over 17 years and that the state lottery earns a 9 percent return on its funds, what is the present value of your prize before taxes if you request the 'up-front cash' option? (Note: Also assume an ordinary annuity-payments made at the end of each period.) Click on the table icon to view the annuity table ? The present value...
ONOFF Chap 5 Problems Due Friday by 11:59pm Points 15 Submitting a text entry box or a file upload Use the examples provided here to work on the following problems (make sure you show all your work) Problem 1: Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving a total of $1,400,000 now, or she can elect to be paid $110.000 at the end of each of the next 25 years. If Gabrielle...
Most questions answered within 3 hours.
-
You draw and keep a single bill from a hat that contains a
$11, $55, $20...
asked 10 minutes ago -
Write a Java program that has the following methods:
findSum - a method that takes in...
asked 11 minutes ago -
A coffee cup calorimeter initially contains 135g of water at
22.0oC. Calcium chloride (21.0g) at the...
asked 14 minutes ago -
A patient is having a magnetic resonance imaging scan (an MRI)
and has neglected to remove...
asked 16 minutes ago -
A student takes a multiple-choice test that has 10 questions.
Each question has two choices. The...
asked 41 minutes ago -
Willie Keeler has a lifetime batting average of 0.341. Assume
that Willie Keeler came to bat...
asked 42 minutes ago -
Which of the following has the highest boiling point?
A) 0.5m NaCl
B) 0.5m C6H12O6
C)...
asked 1 hour ago -
12. A firm is producing at an output level where
AR = MC > AC >...
asked 58 minutes ago -
Radovilsky Manufacturing Company, in Hayward, California,
makes flashing lights for toys. The company operates its production...
asked 1 hour ago -
As an athlete exercises, sweat is produced and evaporated to
jelp maintain a proper body temperature....
asked 1 hour ago -
Which of these macromolecules is most prevalent (by mass) in the
environment? What particular challenge does...
asked 1 hour ago -
Consider two stocks. Stock A has a standard deviation of 46% and
stock B has a...
asked 1 hour ago