Question

Carrie Tune will receive $31,250 for the next 12 years as a payment for a new song she has written. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a. What is the present value of these payments if the discount rate is 11 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b. Should she be willing to sell out her future rights now for $204,000? Yes No

Rita Gonzales won the $66 million lottery. She is to receive $2.3 million a year for the next 25 years plus an additional lump sum payment of $8.5 million after 25 years. The discount rate is 11 percent. What is the current value of her winnings? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

At a growth (interest) rate of 7 percent annually, how long will it take for a sum to double? To triple? Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)