A lottery claims its grand prize is $5 million, payable over 5 years at $1,000,000 per...

Question

Question

A lottery claims its grand prize is $5 million, payable over 5 years at $1,000,000 per year If the first payment is made immediately, what is the grand prize really worth? Use an interest rate of 8% The real value of the grand prize is (Round your response to the nearest dollar)

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

A JotHer claists qrand prize is $s million able over SƠears at $1,000,000 er CAơ Ans- e perlod - s year To cau cwats Te grand prize reallu 二4312116 ment is pmade jmmedia- j- is qn Since firs+p eginning he ear, eTe0 3122 1 S 4312 ) ,6

Add a comment

Answer 2

Similar Homework Help Questions

A lottery claims its grand prize is %15 million, payable over 5 years at $3,000,000 per...

A lottery claims its grand prize is %15 million, payable over 5 years at $3,000,000 per year. If the first payment is made immediately, what is the grand prize really worth? Use an interest rate of 4%. The real value of the grand prize is ?
16. A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000...

16. A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the first payment 16. A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the first payment 86 PART 2 Financial Markets is made immediately, what is this grand prize really worth? Use an interest rate of 6%.
A lottery winner claims a prize of $1.2 million, payable over 30 years at $40,000 per...

A lottery winner claims a prize of $1.2 million, payable over 30 years at $40,000 per year. If the first payment is made immediately, what is this prize really worth given the annual rate of 6.8%?

4. The state lottery claims that its grand prize is $1 million. The lucky winner will...

4. The state lottery claims that its grand prize is $1 million. The lucky winner will receive $100,000 upon presentation of the winning ticket plus $100,000 at the end of each year for the next 9 years. Assume a 8% discount rate. a-Why isn't this really a million-dollar prize? b. What would it actually be worth in dollars to you? c. What would the 10 yearly payments need to be for the present value of the lottery to be $1...
4. The state lottery claims that its grand prize is $1 million. The lucky winner will...

4. The state lottery claims that its grand prize is $1 million. The lucky winner will receive $100,000 upon presentation of the winning ticket plus $100,000 at the end of each year for the next 9 years. Assume a 10% discount rate. a-Why isn't this really a million-dollar prize? (5 Points) b-What would it actually be worth in dollars to you? (5 Points) C-What would the 10 yearly payments need to be for the present value of the lottery to...
Question 1: A lottery claims that its prize is $3 million. The first $1 million is...

Question 1: A lottery claims that its prize is $3 million. The first $1 million is paid immediately, and the second $1 million payment will be made in 1 year, and the third $1 million payment will be made in 2 years. What is the present value of this prize? Interest rate stays at 5% throughout the whole process.

Question 1 & 2 1. Calculate the present value of a $1,000 zero-coupon bond with five...

Question 1 & 2 1. Calculate the present value of a $1,000 zero-coupon bond with five years to maturity if the yield to matu- rity is 6%. 2. A lottery claims its grand prize is $10 million, payable over 20 years at $500,000 per year. If the first pay- ment is made immediately, what is this grand prize really worth? Use an interest rate of 6%.
You have just won the lottery. The prize is $1.2 million, payable is 20 equal annual...

You have just won the lottery. The prize is $1.2 million, payable is 20 equal annual installments. You received the first installment of $60,000 today, you are so happy to be a millionaire. However, your friend claims you really aren't a millionaire. What is the present worth of your winnings, assuming your MARR is 8%?
Present Value of an Annuity 1) On January 1, 2016, you win $2,600,000 in the state lottery. The $2,600,000 prize will be paid in equal installments of $260,000 over 10 years. The payments will be made...

Present Value of an Annuity 1) On January 1, 2016, you win $2,600,000 in the state lottery. The $2,600,000 prize will be paid in equal installments of $260,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31, 2016. If the current interest rate is 5%, determine the present value of your winnings. Use Table 2. Round to the nearest whole dollar. $ 2) Compute Bond Proceeds, Amortizing Premium by Interest Method,...

The grand prize in the OMG Lottery is a choice between $1,000 paid at the beginning...

The grand prize in the OMG Lottery is a choice between $1,000 paid at the beginning of each month for a period of 10 years and a lump sum paid immediately. If you can invest at an effective annual interest rate of 5%, what is the minimum lump sum you would be willing to accept as winner of this lottery? A) $94,766 B) $95,152 C) $94,282 D) $94,675 E) $93,847

A lottery claims its grand prize is $5 million, payable over 5 years at $1,000,000 per...

Homework Answers

Add Answer to:
A lottery claims its grand prize is $5 million, payable over 5 years at $1,000,000 per...

Post as a guest

Earn Coins

A lottery claims its grand prize is %15 million, payable over 5 years at $3,000,000 per...

16. A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000...

A lottery winner claims a prize of $1.2 million, payable over 30 years at $40,000 per...

4. The state lottery claims that its grand prize is $1 million. The lucky winner will...

4. The state lottery claims that its grand prize is $1 million. The lucky winner will...

Question 1: A lottery claims that its prize is $3 million. The first $1 million is...

Question 1 & 2 1. Calculate the present value of a $1,000 zero-coupon bond with five...

You have just won the lottery. The prize is $1.2 million, payable is 20 equal annual...

Present Value of an Annuity 1) On January 1, 2016, you win $2,600,000 in the state lottery. The $2,600,000 prize will be paid in equal installments of $260,000 over 10 years. The payments will be made...

The grand prize in the OMG Lottery is a choice between $1,000 paid at the beginning...

A lottery claims its grand prize is $5 million, payable over 5 years at $1,000,000 per...

Homework Answers

Add Answer to: A lottery claims its grand prize is $5 million, payable over 5 years at $1,000,000 per...

Post as a guest

Earn Coins

Add Answer to:
A lottery claims its grand prize is $5 million, payable over 5 years at $1,000,000 per...