Using a financial calculator yields a present value for option 2 of approximatelyand a present value for option 3 ofapproximately(when the interest rate is 8.00%). Based on this, Dmitri should choose optionif he seeks to maximizepresent value.Now assume the interest rate is 9.00%, entered as 9 on your financial calculator.Note: Take the absolute value of the present value when answering this question.and a presentUsing the table you just filled out and a financial calculator, yields a present value for option 2 of approximatelyif hevalue for option 3 of approximately(when the interest rate is 9.00%). Based on this, Dmitri should choose optionseeks to maximize present value.Assume the interest rate is 10.00%, entered as 10 on your financial calculator.Note: Take the absolute value of the present value when answering this question.and a presentUsing the table you just filled out and a financial calculator, yields a present value for option 2 of approximatelyif hevalue for option 3 of approximately(when the interest rate is 10.00%). Based on this, Dmitri should choose option ▼seeks to maximize present value.attractive, relative to option 1As the interest rate increases, options 2 and 3 become Suppose that Dmitri just won the lottery and must choose between three award options:1. A lump sum of $40,000,000 received today2. 15 end-of-year payments of $5,000,0003. 40 end-of-year payments of $3,600,000Assume the interest rate is 8.00%, entered as 8 on your financial calculator.Note: Take the absolute value of the present value when answering this question.Using a financial calculator yields a present value for option 2 of approximatelyand a present value for option 3 ofapproximately(when the interest rate is 8.00%). Based on this, Dmitri should choose optionif he seeks to maximizepresent value.Now assume the interest rate is 9.00%, entered as 9 on your financial calculator.Note: Take the absolute value of the present value when answering this question.Using the table you just filled out and a financial calculator, yields a present value for option 2 of approximatelyand a presentvalue for option 3 of approximatelyv (when the interest rate is 9.00%). Based on this, Dmitri should choose option vif heseeks to maximize present value.Assume the interest rate is 10.00%, entered as 10 on your financial calculator.Note: Take the absolute value of the present value when answering this question.and a presentUsing the table you just filled out and a financial calculator, yields a present value for option 2 of approximately

The present value of an annuity: When a fixed amount of money is received or paid at constant…

sing a financial calculator yields a present value for option 2 of approximately and a present value for option 3 of proximately (when the interest rate is 8.00%). Based on this, Dmitri should choose option if he seeks to maximize resent value. Now assume the interest rate is 9.00%, entered as 9 on your financial calculator. Note: Take the absolute value of the present value when answering this question. and a present Using the table you just filled out and a financial calculator, yields a present value for option 2 of approximately if he value for option 3 of approximately (when the interest rate is 9.00%). Based on this, Dmitri should choose option seeks to maximize present value. Assume the interest rate is 10.00%, entered as 10 on your financial calculator. Note: Take the absolute value of the present value when answering this question. and a present Using the table you just filled out and a financial calculator, yields a present value for option 2 of approximately if he value for option 3 of approximately (when the interest rate is 10.00%). Based on this, Dmitri should choose option seeks to maximize present value. and 3 hecome attractive, relative to option 1

sing a financial calculator yields a present value for option 2 of approximately and a present value for option 3 of proximately (when the interest rate is 8.00%). Based on this, Dmitri should choose option if he seeks to maximize resent value. Now assume the interest rate is 9.00%, entered as 9 on your financial calculator. Note: Take the absolute value of the present value when answering this question. and a present Using the table you just filled out and a financial calculator, yields a present value for option 2 of approximately if he value for option 3 of approximately (when the interest rate is 9.00%). Based on this, Dmitri should choose option seeks to maximize present value. Assume the interest rate is 10.00%, entered as 10 on your financial calculator. Note: Take the absolute value of the present value when answering this question. and a present Using the table you just filled out and a financial calculator, yields a present value for option 2 of approximately if he value for option 3 of approximately (when the interest rate is 10.00%). Based on this, Dmitri should choose option seeks to maximize present value. and 3 hecome attractive, relative to option 1

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Your aunt offers you a choice of $21,200 in 20 years or $670 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 19 percent, what is the present value of the $21,200? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value a-2. Which offer should you choose? O $21,200 in 20 years O $670 today Prav 3 of 10 Next
Your uncle offers you a choice of $106,000 in 10 years or $43,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 9 percent, what is the present value of the $106,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value a-2. Which offer should you choose? $106,000 after 10 years O $43,000 today
Questions: 1. Using simple interest computations, find the future value of $3,620 at 2 38%/2 38% 2. Now, using compound interest computations, find the future value of $3,620 at 2 38%/2 38% Time Value of Money Solver). Show what you put into the calculator for your work. 3. Now, using compound interest computations, find the future value of $3,620 at 2 38%/2 38% Time Value of Money Solver). Show what you put into the calculator for your work. 4. Explain why the future values are different in questions 1-3. Explain who would benefit from more frequent compounding. Who would be at a disadvantage from more frequent compounding.
Assume that you have just won the lottery. Lotto officials offered you the choice of two alternative payouts: ₱10,000,000 today; or ₱30,000,000 seven years from now. As a wise and financial literate individual, which payment will you choose if relevant interest rate is 10%? Explain your choice in not more than ten (10) sentences and support it with your computation.
8. You are evaluating five different investments, all of which involve an upfront outlay of cash. Each investment will provide a single cash payment back to you in the future. Details of each investment appears here: 2. Calculate the IRR of each investment. State your answer to the nearest basis point (i.e., the nearest 1/100th of 1%, such as 3.76%). Review Only Click the icon to see the Worked Solution (Calculator Use). Click the icon to see the Worked Solution (Spreadsheet Use). The yield for investment A is %. (Round to two decimal places.) The yield for investment B is %. (Round to two decimal places.) The yield for investment C is %. (Round to two decimal places.) The yield for investment D is %. (Round to two decimal places.) The yield for investment E is %. (Round to two decimal places.) 2: Data Table Initial Future End of Investment Investment Value Year A $1,800 $6,387 14 B $9,500 $14,353 11 $600 $3,091 17 D $3,500 $4,505 3 E $5,800 $12,092 12 (Click on the icon located on the…
Give typing answer with explanation and conclusion Find the interest rate (or rates of return) in each of the following situations. Do not round intermediate calculations. Round your answers to the nearest whole number. You borrow $740 and promise to pay back $814 at the end of 1 year. % You lend $740 and receive a promise to be paid $814 at the end of 1 year. % You borrow $60,000 and promise to pay back $171,156 at the end of 8 years. % You borrow $11,000 and promise to make payments of $3,359.50 at the end of each of the next 5 years. %
As the winner of a lottery you are promised 15 payments of $0.98 million each year starting a year from now. If the discount rate is 0.095, what is the present value of your winnings? Instruction: Type ONLY your numerical answer in the unit of millions,
Your aunt offers you a choice of $20,200 in 20 years or $750 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 18 percent, what is the present value of the $20,200? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
You are planning to buy a lottery ticket for the $5,000,000 jackpot. If you have (Option A). the cash option of receiving $5,000,000 today or you can opt to choose (Option B). the 20 payments of $400,000. Your investment account earns 5% interest compounded annually. What is the future value of OPTION A? (Please use two decimals). Answer: 16,035,677.36
Just suppose your won a lottery of $1,000,000 and you have the option to receive it today or in 2 installments of $500,000 over the period of 2 years. Interest rate is 10%. Which option would you prefer and why?
Assume you won the lottery and that you have two options for receiving the prize money. You can receive $300,000 today or receive payments of $2,700 a month for 20 years. If you can make a nominal 8% return, which option should you take and why? (Hint: To compare investments involving cash flows, you always compare the present value of the future cash flows to identify the most attractive option.) Multiple Choice The $2,700 per month. It is better to have payments spread out than receive a lump sum. The lump sum today. The present value of the lump sum is greater than the payments. The $2,700 per month. The present value of the payments is greater than the lump sum. The lump sum today. It has greater earnings potential. 27
You have won the lottery, and you must choose between three award options. You can select one of the following options: To receive a lump sum today of $75 million, To receive 10 end-of-year payments of $12 million, to receive 30 end-of-year payments of $8 million. If you expect to earn 9% annually: What is the present value of alternative ii? What is the present value of alternative iii? Which one you must choose?

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