Who Wants to Be a Millionaire?
option 1 - $10,00,000
Post tax = $6,00,000
option 2 - $1,00,000 next 10years
post tax amount = 60,000
PV in excel formula = pv(5%,10,-60000,0,0)
PMT | 100000 |
Years | 10 |
tax rate | 40% |
Tax deduction | 40000 |
post tax deduction | 60000 |
Present value(PV)Excel | $463,304.10 |
Amount received in lummpsum today = $463304
I would choose option A, considering the interest rate and value which I receive on the yearly payment
Case b.
Haven't won the lottery
Started investing $5 from age 22 till age 65
Tenure = 43
Amount(PMT) = $5
Periodic payments(PMT) | 5 |
Years(NPER) | 43 |
Interest on stock(Rate) | 10% |
Future value(FV) in Excel | $2,962.00 |
Future Value(10%,43,-5,0,0)
if you have started later the value of money or the future value is less compared to starting early
if you start saving from age 32, the fv would be
$1,111.26= FV(FV(10%,33,-5,0,0) |
If you start from age 42,
$397.72==FV(10%,23,-5,0,0) |
So the savings would be less if you start investing late
Who Wants to Be a Millionaire? You just won $1 million dollars in the lottery! They offer you tw...
Two Part Question Who Wants to Be a Millionaire? You just won $1 million dollars in the lottery! They offer you two options for your winnings: a lump sum payment right now, or $100,000 a year over the next 10 years. Current 10-year interest rates are at 5%, and the current tax on lottery winnings is 40%. What is the amount you will receive today with the lump sum option? Which option would you select? How would you present your...
Two part question Who Wants to Be a Millionaire? You just won $1 million dollars in the lottery! They offer you two options for your winnings: a lump sum payment right now, or $100,000 a year over the next 10 years. Current 10-year interest rates are at 5%, and the current tax on lottery winnings is 40%. What is the amount you will receive today with the lump sum option? Which option would you select? How would you present your...
Assignment Details Who Wants to Be a Millionaire? 1. You just won $1 million dollars in the lottery! They offer you two options for your winnings: a lump sum payment right now, or $100,000 a year over the next 10 years. Current 10-year interest rates are at 5%, and the current tax on lottery winnings is 40%. What is the amount you will receive today with the lump sum option? Which option would you select? How would you present your...
πΩ Equation S symbols Question Who wants to be a millionaire? 1. You just won st million dollar in the lottery! They offer you two options for your winnings: a lump sum payment right now or $100.000 a year over the next 10 years Current 10-year interest rates at 5%, and the current taxon lottery winnings is 40% What is the amount you will receive today with the lump sum option Which option would you select? How would you present...
Suppose you have just won a $5 million lottery today. When you win the lottery, you generally receive payments of the lottery jackpot over twenty years. Therefore, your $5 million lottery winnings consist of twenty annual payments of $250,000 each. But wait! Don’t forget about the taxes. The IRS will take 25 percent of each check, so you are left with $187,500 each year. Assume that the annual interest rate is 3%. So, if someone offered you a lump-sum of...
Suppose you have just won a $5 million lottery today. When you win the lottery, you generally receive payments of the lottery jackpot over twenty years. Therefore, your $5 million lottery winnings consist of twenty annual payments of $250,000 each. But wait! Don’t forget about the taxes. The IRS will take 25 percent of each check, so you are left with $187,500 each year. Assume that the annual interest rate is 3%. So, if someone offered you a lump-sum of...
1. Assume I won 5 million dollars in a lottery that pays installments of 1 million dollars a year for five years or a lump sum of less than 5 million dollars. If I take the installments, my first installment would come the day I claimed my winnings at the state lottery office. If I take the lump sum, I would receive that payment the day I claimed my winnings at the state lottery office. Assume that the interest rate...
You have just won the lottery. The prize is $1.2 million, payable is 20 equal annual installments. You received the first installment of $60,000 today, you are so happy to be a millionaire. However, your friend claims you really aren't a millionaire. What is the present worth of your winnings, assuming your MARR is 8%?
If you won the lottery for $10 million and you had the choice to take a lump sum or payments over 20 years, a. which option would you choose? Why? b. What questions do you need answered before you decide? c. What situations may change your decision? Please cite your sources.
You just won $80,000 on a scratch-off lottery ticket. You plan to save the money in a retirement account expected to return 9% per year. If you intend to retire in 45 years, how much are these lottery winnings expected to be worth when you retire? $3,866,183 $871,576 $1,238,815 $9,665,457 $1,260,147 If you find an account that pays 10% annual interest instead of 9%, how much would you have at retirement? $1,890,221 $1,915,227 $3,250,123 $5,831,239 $14,578,097 Suppose the new retirement...