Suppose you just won the state lottery, and you have a choice between receiving $4,500,000 today or a 20-year annuity of $250,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.   a. 1.03%     b. 0.13%     c. -0.77%     d. 2.83%     e. 1.93%

Q: What is the present value of an investment that pays $103 at the end of each of years 1, 2, and 3?…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Suppose you just won the state lottery, and you have a choice between receiving $3,550,000 today or…

A: Choice-1 Amount to receive today is $3,550,000 Choice -2 Annuity amount is $250,000 Time period is…

Q: A lottery offers you a choice of $1,000,000 per year for 30 years or a lump-sum payment. What…

A: Time value of money: The time value of money is the idea that the value of money received today will…

Q: You bought an annuity selling at $11,635.16 today that promises to make equal payments at the…

A: We need to calculate payment per year and present value  An annuity is a periodic payment

Q: 1. A company wants to give an endowment for a college. They wish to give $10,202.41 in perpetuity.…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Suppose that you won $1,500,000 in the Illinois state lottery. It will be paid to you over 20 years…

A: An annuity is end of year equal payments made for a fixed period of time at a specified interest…

Q: You just purchased an annuity that will pay you $24,000 a year for 25 years, starting today. What…

A: Annual payment (P) = $ 24000 Number of annual payments (n) = 25 Interest rate (r) = 8.5%

Q: Congratulations! You have just won a $40 million lottery and have electedto receive $2 million per…

A:

Q: ou just won the NY State Lottery. The Grand Prize is $275 million. Lottery officials give you a…

A: Upfront payment  $        27,50,00,000.00 Periodic Payment 15000000 Time Period 25 Interest…

Q: An aunt gifts you with $12,000, but only after you invest it for one year. She gives you two…

A: INTEREST RATE  4.2% 7.1% PERIOD   12 12 PMT  0 1000 PRESENT VALUE $12,000 0

Q: 2. An brokage house employee is trying to sell you investment instrument, which for a single amount…

A: Present value = Annuity * PVAF ( rate, years ) Present value = Amount * PVIF ( rate, years )

Q: You just won the NY State Lottery. The Grand Prize is $275 million. Lottery officials give you a…

A: Present value of annuities to be received in future would give the value of money today can be…

Q: An investment company pays 9% compounded semiannually. You want to have $16,000 in the future. (A)…

A: Compound interest is the addition of interest to in other words, the principal amount of a loan or…

Q: A state lotto has a prize that pays $600 each week for 15 years. Find the total value of the prize:…

A: Total value of the prize = Price each week * Number of weeks * Number of years

Q: Suppose a state lottery prize is to be paid in 25 payments of $240,000 each at the end of each of…

A: Given,  The payment is $240,000 Term of investment is 25 years

Q: Your girlfriend just won the Florida lottery. She has the choice of $10,700,000 today or a 20-year…

A: Option 1 i.e. Present Value = 10,700,000 Time Period (N) = 20 years Annuity Amount = 1,050,000 End…

Q: You just won a $625,000 lottery prize!  You will receive $25,000 per year for the next 25 years,…

A: Using present value of annuity due formulae, PV of annuity due = PMT * [1-(1/(1+r)^n)/r] * (1+r)

Q: You just won the Florida lottery. To receive your winnings, you must select ONE of the twofollowing…

A: While evaluating two financial options, we must take into consideration the importance of present…

Q: our girlfriend just won the Florida lottery. She has another choice of a 20-year annuity of…

A: To determine  the Future Value of Annuity of $2,850,000 after 20 years, at 4% rate of interest.

Q: 1. A company wants to give an endowment for a college. They wish to give $10,202.41 in perpetuity.…

A: Perpetuity amount = $10,202.41 Interest rate = 8.10% Present value of perpetuity=AmountInterest…

Q: Assume that you just won the state lottery. Your prize can be taken either in the form of 100,000 at…

A: Series of payment made at equal interval is called Annuity.

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: Congratulations! You have just won a $40 million lottery and have elected to receive $2 million per…

A: Given information: Total prize money is $40,000,000 Annual payment is $2,000,000 Number of years…

Q: Congratulations you just won the Colorado Lotto!!! The cash flows below are related to the yearly…

A: Data given: Year               Annuity 1-10              200 11-15            300 16-20…

Q: 1. Shanice Johnson, of Philadelphia, Pennsylvania, wants to invest $4,000 annually  for her…

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: f you put up $41,000 today in exchange for a 5.1 percent, 15-year annuity, what will the annual cash…

A: Present value (PV) = $41000 Interest rate (r) = 5.1% Number of annual payments (n) = 15

Q: If you put up $38,000 today in exchange for a 6.75 percent, 14-year annuity, what will the annual…

A: Solution- We know that  PV=PMT[(1-(1+r)^-n)/r] Where PMT= Periodic payment r= rate n= number of…

Q: You are the lucky winner of the Ohio Lottery !  Congratulations.   The Lottery tells you that you…

A: $20,000,000 prize is to be paid in 20 annual installments of $1,000,000 each.  Interest rate = 8%

Q: 3. You won the lottery!  You are considering whether or not to accept a lump sum amount or an annual…

A: Annuity means a series of finite number of payments which are the same in size and made in equal…

Q: Your best friend won the state lottery and has offered to give you 500,000 in seven years, after he…

A: Present value of an investment is the trading price at which investment is available to the…

Q: You have just won a large lottery prize.  The Lottery Company says the prize will be paid to you in…

A: The present value of annuity due can be calculated by annuity amount multiply with present value of…

Q: A new investment opportunity for you is an annuity that pays $560 at the beginning of each year for…

A: The question gives the following information:

Q: 1. Shanice Johnson, of Philadelphia, Pennsylvania, wants to invest $4,000 annually  for her…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Your dreams of becoming rich have just come true. You have won the State of​ Tranquility's Lottery.…

A: We need to calculate rate by using future value and annuity stream  it is calculated using rate…

Q: Your dreams of becoming rich have just come true. You have won the State of​ Tranquility's Lottery.…

A: Given information: Annual payment is of $160,000 Number of years is 25, Interest rate is 6%

Q: A $1.2 million state lottery pays $5,000 at the beginning of each month for 20 years. How much money…

A: (a)  An ordinary annuity is an annuity in which payments are made at the end of each period. An…

Q: how large must the annual annuity payments be to make you indifferent between the two​ choices?

A: Present Value: It is the present worth of the future amount or future annuity payments.  These…

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

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…