Question

πΩ Equation S symbols Question Who wants to be a millionaire? 1. You just won st million dollar in the lottery! They offer you two options for your winnings: a lump sum payment right now or $100.000 a year over the next 10 years Current 10-year interest rates at 5%, and the current taxon lottery winnings is 40% What is the amount you will receive today with the lump sum option Which option would you select? How would you present your argument for your decision in a debate 2 Sony, you didn't win the lottery buhere's a way you can be a millionaire Starting at age 12. very night you take 35 out of your pocket and it in a n envelope de "Lomery Winning at the end of the year you place the money from the endope in stock unwaverinste of 10 How much you ane in the accounts you retire at age 652 What would be dies if you this plantes in your life Your site e st include follow Subtit l e-paced Word document of 1-2 pages that contain your answers to the four scient e descompaion, any calculation you performed and all fole Also in the Word document, an Excel spreadsheet that shows how you ved at your wat menshot of the online calculator utilized with you annesson The use of scholy toucestgestock article from the CEC Libey is required

Answer 1

fox =FV(F19,F24,-F17) F25 В C D E F G н К L M 17 18 19 20 $1,825.00 Annual savings -$5*365 Pmt Number of years of savings 65-22 Nper 43 Interest rate Rate 10% (Using FV function of excel with Rate-10 % , Nper 43,Pmt-1825) FV Amount in account at age 65 $1,081,131.26 21 Amount in account at age 65 $1.08 million 22 23 |If you start saving later, say at age 40 24 Number of years of Savings-65-40= Nper 25 (Using FV function of excel with Rate-10 % , Nper-25,Pmt--1825) $179,483.38 25 FV Amount in account at age 65 S0 18 aillien 26	1
	a	Amount of lotter won	$1,000,000
	b	Tax Rate	40%
	c=a*b	Taxes paid	$400,000
	d=a-c	Amount received today with lump sum option	$600,000
	e	Amount to be received per year before taxes	$100,000
	Pmt=e*(1-0.4)	After tax amount to be received per year	$60,000
	Rate	Interest rate	5%
	Nper	Number of years payment received	10
	PV	Present Value of amount received	$463,304.10	(Using PV function of excel with Rate=5%, Nper=10,Pmt=-60000)
		Lump Sum amount to be chosen
		Because it isa higher than the present value of annual payment
	2
	Pmt	Annual savings =$5*365	$1,825.00
	Nper	Number of years of savings =65-22	43
	Rate	Interest rate	10%
	FV	Amount in account at age 65	$1,081,131.26	(Using FV function of excel with Rate=10%, Nper=43,Pmt=-1825)
		Amount in account at age 65	$1.08	million
		If you start saving later, say at age 40
	Nper	Number of years of Savings=65-40=	25
	FV	Amount in account at age 65	$179,483.38	(Using FV function of excel with Rate=10%, Nper=25,Pmt=-1825)
			$0.18	million
											F11 =PV(F9,F10, - F8) fox А В E G Н J К L Amount of lotter won $1,000,000 b Tax Rate 40% Taxes paid cEa*b $400,000 Amount received today with lump sum option $600,000 d-a-c Amount to be received per year before taxes $100,000 e Pmt-e*(1-0.4) After tax amount to be received per year $60,000 Rate Interest rate 5% Number of years payment received Nper 10 (Using PV function of excel with Rate-5%, Nper=10,Pmt-6000 Present Value of amount received $463,304.10 PV fox =FV(F19, F18, - F17) F20 X C E G H K L 17 $1,825.00 Annual savings -$5*365 Pmt Number of years of savings-65-22 18 Nper 43 19 Interest rate Rate 10% Amount in account at age 65 (Using FV function of excel with Rate 10 % , Nper 43,Pmt-- 1825 20 FV $1,081,131.26 1 nmillion 21 Amount in arcount at ane 65