On a whim you purchased a scratch-off lottery ticket at the gas station. It must have been your lucky day because you won $1,500,000. Being logical and rational you decide to invest the money at 6% for 11 years until you are ready to start a family. At the end of 11 years, how much will your investment be worth? Future Value of $1Periods2%3%4%5%6%101.2191.3441.4801.6291.791111.2431.3841.5391.7101.898121.2681.4261.6011.7962.012131.2941.4691.6651.8862.133141.3191.5131.7321.9802.261151.3461.5581.8012.0792.397Future Value of Annuity of $1Periods2%3%4%5%6%1010.95011.46412.00612.57813.1811112.16912.80813.48614.20714.9721213.41214.19215.02615.91716.8701314.68015.61816.62717.71318.8821415.97417.08618.29219.59921.0151517.29318.59920.02421.57923.276 $2,847,000 $790,500 $22,458,000 $3,018,000

It is given that a lottery ticket was won for $15000,000 and was invested at a 6% interest rate for…

Answered: On a whim you purchased a scratch-off…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On a whim you purchased a scratch-off lottery ticket at the gas station. It must have been your lucky day because you won $1,500,000. Being logical and rational you decide to invest the money at 6% for 11 years until you are ready to start a family. At the end of 11 years, how much will your investment be worth?

Future Value of $1

Periods	2%	3%	4%	5%	6%
10	1.219	1.344	1.480	1.629	1.791
11	1.243	1.384	1.539	1.710	1.898
12	1.268	1.426	1.601	1.796	2.012
13	1.294	1.469	1.665	1.886	2.133
14	1.319	1.513	1.732	1.980	2.261
15	1.346	1.558	1.801	2.079	2.397

Future Value of Annuity of $1

Periods	2%	3%	4%	5%	6%
10	10.950	11.464	12.006	12.578	13.181
11	12.169	12.808	13.486	14.207	14.972
12	13.412	14.192	15.026	15.917	16.870
13	14.680	15.618	16.627	17.713	18.882
14	15.974	17.086	18.292	19.599	21.015
15	17.293	18.599	20.024	21.579	23.276

		$2,847,000
		$790,500
		$22,458,000
		$3,018,000

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