7) Another pleasant fellow emails to inform you that you have won a Swiss lottery. You can take your winnings in a lump sum of $2,000,000 or receive annual end of year payments of $105,000 for 30 years. Assuming that your money can earn 3% a year, what is the value of the annual annuity stream option? (round to the nearest dollar)
7) Another pleasant fellow emails to inform you that you have won a Swiss lottery. You can take your winnings in a lump sum of $2,000,000 or receive annual end of year payments of $105,000 for 30 years. Assuming that your money can earn 3% a year, what is the value of the annual annuity stream option? (round to the nearest dollar)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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I am not understanding how to use excel to get the answer to this.
Please show excel work. Answer should be: $2,058,046
Transcribed Image Text:7) Another pleasant fellow emails to inform you that you have won a Swiss lottery.
You can take your winnings in a lump sum of $2,000,000 or receive annual end of year
payments of $105,000 for 30 years. Assuming that your money can earn 3% a year,
what is the value of the annual annuity stream option? (round to the nearest dollar)
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