You just won the state lottery. The state gives you the choice of $1,000,000 today or a 20-year annuity of $94,390, with the first payment coming one year from today. What rate of interest is built into the annuity?
Let rate of interest be x%
At this rate;present value of annuity=1,000,000
1,000,000=94,390/1.0x+94,390/1.0x^2+..............+94,390/1.0x^20
Hence x=rate of interest=7%(Approx).
You just won the state lottery. The state gives you the choice of $1,000,000 today or...
Suppose you just won the state lottery, and you have a choice between receiving $2,700,000 today or a 20-year annuity of $250,000, with the first payment coming one year from today. Assuming both choices have the same present value, what rate of return is built into the annuity? Disregard taxes.
Suppose you just won the state lottery, and you have a choice between receiving $3,600,000 today or a 20-year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes. Select the correct answer. a. 4.16% b. 2.56% c. 2.96% d. 3.36% e. 3.76%
finance Suppose you just won the state lottery, and you have a choice between receiving $3,500,000 today or a 20- year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes. Select the correct answer. a. 5.2796 6.2.07% c. 4.4796 d. 2.87% e 36706
113) Your girlfriend just won the Power Ball lottery. She has the choice of $10,000,000 today or a 30-year annuity of $500,000, with the first payment coming today. What rate of return is built into the annuity? a. 2.71% b. 3.08% c. 4.10% d. 3.59% e. 3.91% * using a financial calculanr *
Your best friend just won the Florida lottery. She has the choice of $15.900,000 today or an annuity with payments of $1.050.000 for 20 years, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard any tax consequences. Your answer should be between 2.01 and 14.74, rounded to 2 decimal places, with no special characters. Question 12 5 pts lim sold a car and accepted a note promising cash flows of...
Question 11 5 pts Your best friend just won the Florida lottery. She has the choice of $15,900,000 today or an annuity with payments of $1,700,000 for 20 years, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard any tax consequences. Your answer should be between 2.01 and 14.74, rounded to 2 decimal places, with no special characters. 5 pts Question 12 Jim sold a car and accepted a note...
WHY IS THIS THE ANSWER? (1) You’ve just won the state lottery and will receive 20 annual payments of $70,000, with the first payment arriving 1 year from today. It is easy for you to borrow or lend on the capital market at an interest rate of 8% per year. If someone offered to buy your stream of winnings for a one-time payment of $1,000,000, would you sell? Answer: Yes, you could discount each payment to find the present value...
Question 21 (4 points) Your significant other just won the Power Ball lottery. S/he has the choice of $10 million today or a 20-year annuity of $700000, with the first payment coming today. What rate of return would make you indifferent between the two alternatives? Your Answer: Answer units
You have just won the initial School of Finance lottery! You have won $10,000 today, $20,000 four years from today, and $30,000 six years from today. As an alternative, you can receive your winnings as a 10-year annuity with the first payment received ten years from today. If you require a 6% return on your investment, how much must the annuity pay you each year for you to select that option?
28. Recently, in an ad on television, the announcer declared that the Indiana State Lottery was currently worth $30,000,000. Starting one year from today, the lucky winner would receive $1,000,000 at the end of each of the next 30 years. At 6% interest rate and assuming there are no taxes on the winnings, what is the actual present value of this lottery for the winner? a. b. If gamblers bought a total of S30,000,000 in tickets and one person won,...