Winners of the Dream a Dream Lotto draw are given the choice of receiving the winning amount divided equally over 22 years or as a lump sum cash option amount. The cash option amount is determined by discounting the winning amount at 9 percent interest compounded quarterly over 22 years. This week the lottery is worth $18 million to a single winner.
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- On January 1, you win $1,440,000 in the state lottery. The $1,440,000 prize will be paid in equal installments of $180,000 over 8 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 6%, determine the present value of your winnings.On January 1, you win $4,800,000 in the state lottery. The $4,800,000 prize will be paid in equal installments of $480,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31 of the current year. If the current interest rate is 6%, determine the present value of your winnings. Use Table 3. Round to the nearest whole dollar.On January 1, you win $60,000,000 in the state lottery. The $60,000,000 prize will be paid in equal installments of $6,000,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31 of the current year. If the current interest rate is 6%, determine the present value of your winnings. Use the present value factor of annuity of $1 Show your work:
- On January 1 you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. If the current interest rate is 12%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar. Will the present value of your winnings using an interest rate of 12% be more than the present value of your winnings using an interest rate of 5%?The winner of a lottery chooses to receive annual payments of $170,000 at the end of each year for 25 years. If the current interest rate is 4.2 %, find the present value (in dollars) of the payments. (Round your answer to the nearest cent. See Example 5 in this section.)The florida lottery agrees to pay the winner $285,000 at the end of each year for the next 20 years. What is the future value of this prize if each payment is put in an account earning 0.08?
- Joan Lucky won the $44,000,000 lottery. She is to receive $1.3 million a year for the next 25 years plus an additional lum payment of $11.5 million after 25 years. The discount rate is 18 percent. What is the current value of her winnings? (Use a Financial calculator to arrive at the answer. Round the final answer nearest whole dollar.) Current Value $On January 1, you win $50,000,000 in the state lottery. The $50,000,000 prize will be paid in equal installments of $6,250,000 over eight years. The payments will be made on December 31 of each year, beginning on December 31 of this year. If the current interest rate is 5%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar.You win a 1.8 million dollar lottery prize. You have a choice between recieving the winnings through regular payments over 20 years or recieving a lump sum amount equal to the present value of the prize, calculated with an annual interest rate of 4.4 %. Consider the decision by answering the questions below. Round all answers to the two decimal places (the nearest cent). (a) If you receive the winnings through equal payments (at the end of the year) for 20 years, how much would each payment be? Payment amount: $ (b) If you opt to recieve the present value of the winnings, how much would you receive?
- On January 1, you win $51,750,000 in the state lottery. The $51,750,000 prize will be paid in equal installments of $5,750,000 over nine years. The payments will be made on December 31 of each year, beginning on December 31 of this year. The current interest rate is 5%. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.Open spreadsheetDetermine the present value of your winnings. Round your answer to the nearest dollar $ fill in the blank 2Joan Lucky 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. (Provide answers in terms of millions of dollars. Round "PV Factor" to 3 decimal places. Round the final answer to the nearest whole dollar.) Current Value %24 19.995The winner of a lottery is awarded $ 6,000,000 to be paid in annual installments of $300,000 for 20 years. Alternatively, the winner can accept a "cash value" one-time payment of $2,700,000. The winner estimates he can earn 8% annually on the winnings. What is the present value of the installment plan? (Round your answer to two decimal places.)