Kershaw Bales won the state lottery and was given four choices for receiving her winnings. Receive...
Kershaw Bales won the state lottery and was given four choices for receiving her winnings.
Receive $500,000 right now.
Receive $540,000 in one year.
Receive $50,000 at the end of each year for 20 years.
Receive $45,000 at the end of each year for 30 years.
Assuming Kershaw can earn interest of eight percent compounded annually, which option should Kershaw choose? Use Excel or a financial calculator for computation. Round answers to the nearest dollar.
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Kershaw Bales won the state lottery and was given four choices
for receiving her winnings.
Receive...
Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving...
Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $250,000 right now. 2. Receive $270,000 in 1 year. 3. Receive $45,000 at the end of each year for eight years. 4. Receive $22,500 at the end of each year for 40 years. Assuming Kerry can earn interest of 8% compounded annually, (a) calculate each option and (b) determine which option Kerry should choose? Use Excel or a financial calculator...
Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving...
Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $400,000 right now. 2. Receive $432,000 in 1 year. 3. Receive $75,000 at the end of each year for eight years. 4. Receive $38,000 at the end of each year for 30 years. Assuming Kerry can earn interest of 8% compounded annually, (a) calculate each option and (b) determine which option Kerry should choose? Use Excel or a financial calculator...
Gabrielle just won $3 million in the state lottery. She is given the option of receiving...
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.)
Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving...
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?
Juan just won $2.5 million in the state lottery. He is given the option of receiving...
Juan just won $2.5 million in the state lottery. He is given the option of receiving a total of $1.3 million now, or he can elect to be paid $100,000 at the end of each of the next 25 years. If Juan can earn 5% annually on his investments, from a strict economic point of view, which option should he take? Explain why.
Juan just won $2.5 million in the state lottery. He is given the option of receiving...
Juan just won $2.5 million in the state lottery. He is given the option of receiving a total of $1.3 million now, or he can elect to be paid $100,000 at the end of each of the next 25 years. If Juan can earn 5% annually on his investments, from a strict economic point of view, which option should he take? Explain why.
Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving...
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...
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...
Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a total of $1.3 million now,...
Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a total of $1.3 million now, or she can elect to be paid $100,000 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 and what formula to use?
You have just won the Multi-State Lottery. You have the option of receiving a check for...
You have just won the Multi-State Lottery. You have the option of receiving a check for $40,000,000 every year at the end of the next 23 years. The lottery commission also allows you the option of receiving a one-time payment of $414,842,358 when you turn in the winning ticket. What is the approximate interest rate that the lottery commission is using to determine the one-time payment? (Use spreadsheet software or a financial calculator to calculate your answer. Do not round...
Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $250,000 right now. 2. Receive $270,000 in 1 year. 3. Receive $45,000 at the end of each year for eight years. 4. Receive $22,500 at the end of each year for 40 years. Assuming Kerry can earn interest of 8% compounded annually, (a) calculate each option and (b) determine which option Kerry should choose? Use Excel or a financial calculator...
Present Value Computation Kerry Bales won the state lottery and was given four choices for receiving her winnings. 1. Receive $400,000 right now. 2. Receive $432,000 in 1 year. 3. Receive $75,000 at the end of each year for eight years. 4. Receive $38,000 at the end of each year for 30 years. Assuming Kerry can earn interest of 8% compounded annually, (a) calculate each option and (b) determine which option Kerry should choose? Use Excel or a financial calculator...
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.)
You have just won the Multi-State Lottery. You have the option of receiving a check for $40,000,000 every year at the end of the next 23 years. The lottery commission also allows you the option of receiving a one-time payment of $414,842,358 when you turn in the winning ticket. What is the approximate interest rate that the lottery commission is using to determine the one-time payment? (Use spreadsheet software or a financial calculator to calculate your answer. Do not round...
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