A $1.2 million state lottery pays $5,000 at the beginning of each month for 20 years. How much money must the state actually have in hand to set up the payments for this prize if money is worth 8%, compounded monthly? (a) Decide whether the problem relates to an ordinary annuity or an annuity due. (b) Solve the problem. (Round your answer to the nearest cent.)

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A: State lotto is a kind of lottery program that engages people into a game of luck and probability…

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Q: A lottery offers you a choice of $1,000,000 per year for 30 years or a lump-sum payment. What…

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A:

Q: Mega lotteries in country X pay out $1 million jackpots in the form of ordinary annuity of $5,000…

A: Ordinary Annuity = $5,000 Time period = 2000 months Lump sum = $600,000  Discount rate = 8% APR

Q: Suppose that you won $1,500,000 in the Illinois state lottery. It will be paid to you over 20 years…

A: An annuity is end of year equal payments made for a fixed period of time at a specified interest…

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A: Future Value  $          1,80,000.00 Time Period 3 Interest Rate 0.80%

Q: Clearlake Optical has a $50,000 note that comes due in 6 years. The owners wish to create a sinking…

A: Future Value = $50,000 Time period = 6 Years Interest rate = 3.5%

Q: ou just won the NY State Lottery. The Grand Prize is $275 million. Lottery officials give you a…

A: Upfront payment  $        27,50,00,000.00 Periodic Payment 15000000 Time Period 25 Interest…

Q: If a donation of $100,000 is expected to pay out scholarships of $10,000 every year and the funds…

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Q: . Lottery Winnings The winner of a “million dollar”lottery is to receive $50,000 plus $50,000 at…

A: present value of annuity (PVA)=A×1-11+rnr A=annuity r=rate of interest n=number of years

Q: Felice Lucas has just won the state lottery and has the following three payout options for​…

A: Present value of the first option = Amount receivable at the end of each year x Present value of an…

Q: Please show excel formulas.

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A: In this question, we need to compute the semiannual deposit amount in the sinking fund. A sinking…

Q: A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the…

A: Given information: Grand Prize : $10 million Payments every year : $2 million Time : 5 years…

Q: A state lotto has a prize that pays $600 each week for 15 years. Find the total value of the prize:…

A: Total value of the prize = Price each week * Number of weeks * Number of years

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A: Given,  The payment is $240,000 Term of investment is 25 years

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Q: Suppose you just won the state lottery, and you have a choice between receiving $3,600,000 today or…

A:

Q: How much would you accept in a lump sum today, in place of a lottery payment of $35,000 at the end…

A: Formula:

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A: An annuity is a series of payments made at regular intervals

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A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

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Q: What is the future value of this prize if each payment is put in an account earning 0.08?

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Q: You have just won 50 million in the lottery, payable in equal yearly installments over the next 20…

A: To calculate the minimum lump sum amount needed, we have to use present value of money concept.…

Q: The top prize for the state lottery is $105,704,000. You have decided it is time for you to take a…

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Q: A state lotto has a prize that pays $500 each week for 35 years. Find the total value of the prize:…

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Q: In a book named Treasure, the reader has to figure out where a 2.2 pound, 24 kt gold horse has been…

A:

Q: A state lotto has a prize that pays $1,700 each week for 25 years. Find the total value of the…

A: It is based on the time value o money. The Amount to be invested today which will fetch desired…

Q: A state lotto has a prize that pays $1,100 each week for 20 years. Find the total value of the…

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Q: 1. Mark started to deposit P18,000 semi-annually in a fund that pays 5% compounded semi-annually.…

A:

Q: Suppose a state lottery prize is to be paid in 25 payments of $360,000 each at the end of each of…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

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A: Present Value of Annuity = Amount ÷ Rate of Interest

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A: Hey, since there are multiple sub-part questions posted, we will answer the first three questions.…

Q: Assume that you just won the state lottery. Your prize can be taken either in the form of $40,000 at…

A: Present value is the current worth of future cashflows discounted at any given rate.

Q: A $2.4 million state lottery pays $10,000 at the beginning of each month for 20 years. How much…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.