If you were to invest $50,000 from you lottery winnings today, how much will it be worth in 20 years assuming a 7% rate of return?

Q: You want to save $800 a month for the next 30 years and hope to earn an average rate of return of 12…

A: The equal series of payment will be annuity. To compute the money after certain point of time in…

Q: You are going to invest $6829 in 1 years and $7200 in 4 years.  If you expect to earn a return of…

A: The time value of money is a fundamental concept in finance that recognizes the idea that money…

Q: The prize in last week’s lottery was estimated to be worth $90 million. If you were lucky enough to…

A: Present value = Annual payment + Annual payment×1-(1+r)-(n-1)r=$3.6 million +$3.6…

Q: What is the most you would be willing to pay for an investment that will pay you $537 in one year,…

A:

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 are looking at an investment that promises to pay $2000 per year forever! What is the value of…

A: A cash flow that goes on forever is called a perpetuity.Here the cash flow of $2000 per year forever…

Q: If you invest at 1.59% APY, how many years will it take to turn $1 into $9?

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: Suppose an investor wants to have $5 million to retire in 25 years from now. How much would she have…

A: Present Value is the current value of all the cash flows which is to be received in the future which…

Q: You just won the $78 million Ultimate Lotto jackpot. Your winnings will be paid as $2,600,000 per…

A: Given information: Winnings will be paid as $2,600,000 per year Number of years paid is 30, Interest…

Q: You buy a new piece of equipment for $11,778, and receive a cash inflow of $2,000 per year for 10…

A: Initial Investment is $11,778 Cash Inflow per year = $2,000 Time Period = 10 Years

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: Suppose you have an investment offer that guarantees an average investment gain of $1,000 per year.…

A: The average rate of change describes the rate at which one quantity changes in relation to another.…

Q: Choose the option to correctly complete the following sentence. Today is January 1, 2020. On the…

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

Q: Present Value You will require $700 in 5 years. If you earn 5% interst on your funds, how much will…

A: The computation is as follows: Hence the present value is $548.47.

Q: An investment plan gives you 4 different options: Plan A: receive $325,000 today: Plan B: receive…

A: Present value of perpetual cash flows is calculated as follows:-Present value of perpetual cash…

Q: Suppose that you plan to invest $1500 at the end of each of the next 9 years, and you want to have…

A: Rate of return refers to the minimum return to be earned by the investors on the initial investment…

Q: You invest in a project that generates fixed annual cashflows of $135 for 5 years beginning in 5…

A: In the above question we are required to find out the present value of annuity due.

Q: Now, drawing on your understanding of the concept of present value, calculate how much you would…

A: Present value is the discounted value of future cashflow

Q: Suppose you want to have S0.5 million saved by the time you reach age 30, and suppose you are 20…

A: Future value of the investment (FV) = $500000 Number of years of investment (n) = 10 Rate of…

Q: is the rate of return on an investment of $9210 if the investor will recieve $2000 each year for the…

A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…

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: You are going to invest $9237 today and $9695 1 year from today.  If you expect to earn a return of…

A: Step 1 Future value is the amount of money that, with time and an interest rate, is invested now and…

Q: If you invest $5,000 today, you will receive $1,000 in a year, $1,500 each in year 2 and year 3, and…

A: Calculate the net present value as follows:

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

A: Present value defines the current value of an asset that will be present at sone futrue date…

Q: You have $12044 to invest and want to save up $26452.  You hope to earn a return of 9.5%.  How long…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

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 are saving for retirement. You hope to haye $1,000,000 accumulated in 35 years, making equally-…

A: It can be calculated using PMT(rate, nper, pv, [fv], [type])   Rate The interest rate for the loan.…

Q: You have received $200,000 from the PowerBall Lottery and want to have half that amount available…

A: Total lottary amount = $200,000 Amount required at retirement (FV) = $200,000/2 = $100,000 Interest…

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: How much time will it take you to accumulate $500,000, assuming you invest $15,000 today and $150 /…

A: The time value of money concept states that the value of a certain amount of money on the future…

Q: You purchase an investment for $1,000. You expect it will increase in value at a rate of 9% per…

A: Initial Investment is $1,000 rate is 9% per yeat time period is 12 years   To Find:- Worth of…

Q: You are going to invest $5405 in 3 years and $7923 in 6 years.  If you expect to earn a return of…

A: Future value of investment amount is calculated as Future value = Value of investment×1+rn Where, r…

Q: An investor plans to invest $500 a year and expects to get a 10.5% return. If the investor makes…

A: Formula to be used,   PV = P[1-(1+r)^-n]/r where, PV=Present value P=Principal amount r=Rate of…

Q: You expect to receive $150,000 per year on a contract that will last 5 years. You are trying to…

A: Present value of future cash inflows will be equal to the worth of contract today.   Worth of…

Q: A lottery jackpot of one million is paid out $25,000 a year for 40 years. At a 10 percent required…

A: Using excel PV function to calculate Present value of annuity due

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.