Jason just won the Island Luck grand prize give away of $1,200,000. He is offered $100,000 a year for twelve (12) years or receive a lump sum of $725,000 right away. If he can earn 7%, which alternative is better? Include the working
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Jason just won the Island Luck grand prize give away of $1,200,000. He is offered $100,000 a year for twelve (12) years or receive a lump sum of $725,000 right away. If he can earn 7%, which alternative is better? Include the working
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- Ellen won a lottery that will pay her $100,000 a year for 20 years, or she can accept $1,500,000 today. A)Assuming she can earn 2.5% and maximizing her winnings is the only consideration, which offer should she accept? Show your calculations. B)Assuming she can earn 3%, what would be the lump sum today equivalent to the 20 payments of $100,000?A man who won 730,000 pesos in a lottery decided to place 50% of his winnings in a trust fund for the college education of his son. If the money will earn 14% a year compounded quarterly, how much will the man have at the end of 6 years, when his son will be starting his college education?Francis wants to start a foundation that will pay its beneficiaries $64,000 per year forever, with the first cash flow occurring one year from today. If the funds will be invested to earn 7% per year, how much must Frank donate today? Enter your answer as a positive number rounded to the nearest penny.
- Leonard wants to have $400,000 in his RRSP when he retires in 31 years. How much must he deposit at the end of each month into the RRSP in order to reach his goal? Assume that he can earn j12=4.8% on his money. Your Answer: AnswerJane won the $70 million lottery. She is to receive $1 million a year for the next 50 years beginning one year from now, plus an additional lump sum payment of $10 million after 50 years. The discount rate is 10 percent. How much cash would she need to be offered today to tempt her to take a lump-sum cash offer instead, all things equal? Please show all your work.Mary Cooper, Sheldon's mother, who lives in east Texas, wants to help pay for her grandchild's education. How long will it take Mary to reach her goal of $295,000 if she invests $10,000 per year, earning 6 percent? Use Appendix A-3 or the Garman/Forgue companion website. Round your answer to the nearest half-year. years
- Ronald has an investment opportunity that promises to pay him $55,000 in three years. He could earn a 6% annual retum investing his money elsewhere. What is the most he would be willing to invest today in this opportunity?A man won 300,000 in a lottery decided to place 50% of his winning in a trust fund for the college education of his son. If the money will earn 14% per year compounded quarterly, how much will be the money at the end of ten years when his son will be starting his college education? Provide the cash flows and diagram.Meredith, who is single, would like to contribute $6,000 annually to her Roth IRA. Her AGI is $125,000. What is the maximum amount that Meredith can contribute? Show your calculations using Microsoft Excel. 2. Assume that Meredith’s AGI is $100,000. She plans to put $6,000 each year into her Roth IRA, hoping to earn 6% annually. What future value will accumulate in her Roth at the end of 20 years? 3. In part (b), instead assume that Meredith puts the $6,000 into the Roth for 15 years at 6%. How much will accumulate at the end of this period?
- Jane Bauer has won the lottery and has the following four options for receiving her winnings: Receive $100,000 at the beginning of the current year Receive $108,000 at the end of the year Receive $20,000 at the end of each year for eight years Receive $10,000 at the end of each year for 30 years Jane can invest her winnings at an interest rate of 8% compounded annually at a major bank. Use the appropriate present or future value table: FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1 Calculate the Present value for each of the above options. Round all answers to the nearest dollar. Present Value Option 1 $fill in the blank 1 Option 2 $fill in the blank 2 Option 3 $fill in the blank 3 Option 4 $fill in the blank 4 Which of the payment options should Jane choose?Alex has been offered an engineering job with a large company that has offices in Makati and Laguna. The salary is P720,000 per year at either location. Makati's tax burden is 20% and Laguna's is 15%. If Alex accepts the position in Laguna and stay with the company for 5 years, what is the FW (future worth) of the tax savings? Your personal MARR is 10% per year. (Hint: Use 5% = 20% - 15%) (A) P219,783.60 (B) P4,395,672.00 C) P2,729,366.47 D) P136,468.32Gabrielle just won $2.7 million in the state lottery. She is given the option of receiving a of $1,200,000 now, or she can elect to receive $90,000 at the end of each of the next 30 years. If Gabrielle can earn 5% annually on her investments, which option should she take? If Gabrielle takes the prize as an annuity, the present value of the 30-year ordinary annuity is? Can you do it in an excel format?
