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 front cash option is $_____ (round your answer to the nearest dollar)
The present value of your prize before taxes if you request the up front cash optin
Prize for each = $1500000 | ||||
Annual Payment = $1500000/16=$93750 | ||||
We need to calculate the present value of the annuity | ||||
= PVAF (16 years ,9%) *$93750 | ||||
=8.312558*$93750 | ||||
$ 7,79,302 | ||||
Present Value of prize = $779302 | ||||
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 18 years and that the state lottery earns a 3 percent return on its funds, whatis the present value of your prize before taxes r you recu uest the 'up-front cash' option? Click on the table icon to view the annuity table The present value of your prize before taxes if you request the 'up-front cash' option is S...
You and 11 coworkers just won $19 million ($1,583,333.33 each) from the state lottery. Assuming you each receive your share over 17 years and that the state lottery earns a 5 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.) The present value of your prize before taxes if you request the 'up-front cash'...
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...
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 8 percent return on its funds, what is the present value of your prize before taxes if you request the up-front cash' option? Click on the table icon to view the annuity table The present value of your prize before taxes if you request the 'up-front cash' option is S...
You and 11 coworkers just won $12 million ($1,000,000.00 each) from the state lottery. Assuming you each receive your share over 16 years and that the state lottery earns a 4 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.)
You and 11 coworkers just won $5 million ($416,666.67 each) from the state lottery. Assuming you each receive your share over 19 years and that the state lottery earns a 6 percent return on its funds, what is the present value of your prize before taxes if you request the 'up-front cash' option?
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.)
Congratulations! You have just won the State Lottery. The lottery prize was advertised as an annualized $105 million paid out in 30 equal annual payments beginning immediately. The annual payment is determined by dividing the advertised prize by the number of payments. Instead you could take a one lump cash prize of the present value of all the annuity payments using a 4.5% discount rate. You now have up to 60 days to determine whether to take the cash prize...
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...
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...