A lottery claims its grand prize is $15 million, payableover five years at $3,000,000 per year. If the firstpayment is made immediately, what is this grand prizereally worth? Use an interest rate of 7%

Q: You win a 1.8 million dollar lottery prize. You have a choice between recieving the winnings through…

A: Here,Lottery Prize is $1,800,000Time Period is 20 yearsAnnual Interest Rate is 4.4%

Q: An investor has just won the lottery and will receive $200,000 per year at the end of each of the…

A: present value refers to the concept of the time, value of money which is used by investors for…

Q: You have won a state lottery prize quoted as “$12 million dollar lottery”, what this really mean is…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: An investment pays $2,100 per year for the first 7 years, $4,200 per year for the next 7 years, and…

A: The discount rate is 8.20% compounding quarterly. The cash flows have a periodicity of 1 year.…

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

A: Annuity refers to the periodic payment or receipt of cash flow. The annuity period usually…

Q: An investor is considering two investment projects. Project A requires an initial payment of…

A: The crossover rate is the discount rate at which the net present value (NPV) of the cash flows of…

Q: An asset is projected to generate 17 annual cash flows of $36,000 starting 5 years from today. If…

A: Present Value: It represents the current worth of the future expected cash flows. It is computed by…

Q: The $9.4M lottery that you just won actually pays ($9.4M divided by 40) per year for 40 years. If…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: The winner of a $10,000,000 prize has the following payment choices. If the interest rate is 10%,…

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

Q: You are planning to buy a lottery ticket for the $5,000,000 jackpot. If you have (Option A). the…

A: Option A is receiving $5,000,000 today. Present Value = $5,000,000 Interest rate, r = 5% Compounding…

Q: Suppose a lottery payout is $100,000 per year for the next ten years. If the annual interest rate is…

A: Money worth today is the present value of cash flow from the prize based on the time value of money.

Q: How much would you have to invest today to receive: Use Appendix B and Appendix D. (Round "PV…

A: Present value is the equivalent value of money today based on the time value of money that is going…

Q: Assume you win a lottery, and you are offered the following stream of payments by the lottery…

A: Future value of cash flows will be reflective of the value of cash flows in the future after…

Q: 1.Compute the present value of an annuity of $503 per year for 18 years, given a discount rate of 8…

A: The present value of money is a financial concept that refers to the current worth of a future sum…

Q: An investment pays $2,100 per year for the first 4 years, $4,200 per year for the next 3 years, and…

A: The real interest that an investor earns on the investment and a borrower pays on loan after…

Q: You will receive $5,000 one year from now, 6000 three years from now, and 7000 five years from now…

A: The PV of an investment refers to the total value of all the future cash flows discounted to the…

Q: Suppose you just won a lottery of $100 million, that will can be cashed out over 5 years ($20…

A:

Q: You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that…

A: Payment Today = p0 = $1 millionNumber of Payment = 10Year 1 Payment = p1 = $1.51 millionYear 2…

Q: Calculate the present value of a $10000 lottery payment for today, and two annual future payments,…

A: We need to use present value formula given below to calculate present value of future payments…

Q: As the winner of a competition you are entitled to $5,000 at the end of next year, with this amount…

A: It is a case of the growing annuity. Here, the annuity is growing each year with a fixed percentage.…

Q: An asset is projected to generate 15 annual cash flows of $32,000 starting 6 years from today. If…

A: Present Value:It represents the current worth of the future expected cash flows.It is computed by…

Q: 23. A person wins Euro Dreams, a lottery that pays 20.000 € per month for 30 years. If the current…

A: Monthly payments = 20,000€Years =30Annual rate =6%To find the present value of these earnings.

Q: Suppose you won the lottery that will payout over 20 years. The 1st payment you receive will be…

A: given time = 20 first payment = $150000

Q: An investment pays $1,950 per year for the first 3 years, $3,900 per year for the next 8 years, and…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: You have won the lottery! The lottery officials have given you a choice between receiving (A)…

A: Solution Given Two options are (A) $15,000,000 today, or (B) $1,000,000 at the end of each of the…

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:

Q: You have just won the lottery and will receive $580,000 in one year. You will receive payments for…

A: Data given: Cash flow Year 1 (CF1) =$580000 n=28 years Growth (g)=3% Discount rate (r) =11%…

Q: he $37.7 million lottery payment that you just won actually pays $2.9 million per year for 13 years.…

A: Present value is current value of future cash flow discounted at an appropriate discount rate; in…

Q: A lottery winner will receive $6 million at the end of each of the next twelve years. What is the…

A: To calculate the future value (FV) when the winner receives $6 million at the beginning of each of…

Q: he lottery commission is offering the winner of a recent jackpot a payout of 15 yearly payments…

A: 1.Present value of annuity.PV = A*wherePV = present value of annuityA = periodic paymentsr =…

Q: An individual wins a lottery prize of £3,000 payable every 6 months in arrears for 10 years. What is…

A: Present value is the current value of a future sum of money or stream of cash flows given a…

Q: Comparing Lottery Payouts A lottery winner is given two options: Option I: Receive a $20 million…

A: There are two options with different streams of cash flows. The better of the two, needs to be found…

Q: The $45 million lottery prize that you have just won actually pays out $4.5 million a year for 20…

A: The topic is related to financial mathematics, more precisely to the process of calculating a cash…

Q: You have won a state lottery prize quoted as "$12 million dollar lottery", what this really mean is…

A: Cahs payout refers to an amount that is borrowed in total by the borrower from the lender at a…

Q: An investor is considering two investment projects. Project A requires an initial payment of…

A: The crossover rate is the discount rate at which the net present value (NPV) of the cash flows of…

Q: 3: A lottery winner has a decision between a lump sum of $1,000,000 or a 20 year annuity of $100,000…

A: The lump sum amount is $1,000,000. The annual payment is $100,000. The rate of interest is 5%. The…

Q: You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that…

A: Time value of money refers to the concept that money in hand today is worth more than the same…

Q: Assume you win a lottery, and you are offered the following stream of payments by the lottery…

A: Future value of cash flows will be reflective of the value of cash flows in the future after…

Q: You have just won a two-part lottery! The first part will pay you $50,000 at the end of each of the…

A: The idea of present value suggests that the worth of a future sum of money is lower compared to its…

Q: perpetual equivalent annual worth

A: Annual worth refers to the net of all the benefits and the expenses which are incurred in the…

Q: (c) A sum of 10,000 RO is required in 5 yoars from now. An annual sinking fund is to be sot up that…

A: A sinking fund is created by setting the required amount periodically. The sinking fund is set up to…