Present Value of an Annuity On January 1, you win $50,000,000 in the state lottery. The...
Present Value of an Annuity
On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. If the current interest rate is 5%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.
Homework Answers
Present value of annuity at 5% for 8 years = 6.46321
Annual instalments = $6,250,000
Present value = $6,250,000 X 6.46321 = $40,395,063
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Present Value of an Annuity
On January 1, you win $50,000,000 in the state lottery. The...
On January 1 you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid...
On January 1 you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. If the current interest rate is 5%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar. Exhibit 7: 8 periods at 6.46321
On January 1, 2016, you win $50,000,000 in the state lottery. The $50,000,000 prize will be...
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On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 5.5%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. EXCEL SHEET: Present value of an...
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eBookPresent Value of an AnnuityOn January 1, you win $5,000,000 in the state lottery. The $5,000,000 prize will be paid in equal installments of $500,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 7%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.
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