You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 annual installments. The first payment is next year. How much is the prize really worth? The discount rate is 8 percent.

Q: A lottery is offering a payout of 2000 every 4 weeks for 10 years. What is the value of the prize…

A:

Q: You have just won the lottery and will receive $490,000 in one year. You will receive payments for…

A: Solution: When an amount is received each period at a constant growth rate per period, this is known…

Q: Determine the present value if OMR15,000 is to be received at the end of eight years and the…

A: The present value = amount to be received after 8 months * PVIF (discount rate , n) = $15000 * PVIF…

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

A: Annual cash inflow (P) = $ 91,873 Discount rate (r) = 6% Number of annual deposits (n) = 12

Q: 25) You have just won the "forever lottery", guaranteeing to pay you and/or your descendants $10,000…

A: Given information,PMT: Discount rate: Compounding frequency: MonthlyNPER: Never endingTo…

Q: You won the lottery. You may receive a one-time cash payout today or receive $340,000 in 13 years.…

A: Future Value = fv = $340,000Time = t = 13Discount Rate = r = 12%

Q: need $20,000 five years from now. The account pays 9% compounded annually. If you will receive…

A: Present value is the equivalent value today of the future cash flow based on the time and interest…

Q: You are purchasing a new machine every 5 years. The new machine costs $55000. You want to start…

A: Future value of amount includes the amount being deposited over the period of time and amount of…

Q: 2. Upon graduating from college this year, you expect to earm $25,000 per year. If you get your BBA,…

A: Face value of loan is the value for which a borrower is going to take loan. The interest amount is…

Q: A lottery pays the winner $1 million in 20 equal annual payments of $50,000. The first payment will…

A: Working note:

Q: The $9.4M lottery that you just won actually pays ($9.4M divided by 40) per year for 40 years. If…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: 15. You are offered the right to receive $1000 per year forever, starting in one year. If your…

A: Present value of perpetuity-Annual cash rate flows/discount.

Q: You are offered the right to receive $2,000 per year forever, starting in one year. If your discount…

A: Annuity that offered to pay some amount forever is called perpetuity. The worth of offer would be…

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: A $3.6 million state lottery pays $15,000 at the beginning of each month for 20 years. How much…

A: Annuity is a stream of recurring stream of cashflow. Annuity due is the cashflow made or received at…

Q: 13. You won $100 000.00 in a lottery and you want to set some of that sum aside for 4 years. After 4…

A: According to the time value of money, the value of the money today is more than the value of the…

Q: You are offered the right to receive $2,000 per year forever, starting in one year. If your discount…

A: Right to receive per year forever is perpetuity. Present value of perpetuity is annual amount/…

Q: Suppose you buy car for $67,000 today with an interest rate of 12% over 5 years what is your monthly…

A: Time value of money is a financial concept which is used to calculate the value of money in present…

Q: Calculate the present value of $4,500 due in 5.5 years. Use a discount rate of 9% compounded…

A: Discounting is a way to find the PV of future cashflows by considering appropriate rate or PVF. It…

Q: a. If the first payment is made four years from now, what is this grand prize really worth today?…

A: Present Value is the value of money in today at zero period for all the payments which is received…

Q: You won the lottery. You could receive $100,000 a year for the next 10 years or a lump sum today.…

A: An ordinary annuity is a series of payments made at the end of a period with equal intervals. The…

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 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: As the winner of a competition you are entitled to $5,000 at the end of next year, with this amount…

A: It is a case of the growing annuity. Here, the annuity is growing each year with a fixed percentage.…

Q: 23. A person wins Euro Dreams, a lottery that pays 20.000 € per month for 30 years. If the current…

A: Monthly payments = 20,000€Years =30Annual rate =6%To find the present value of these earnings.

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: 7. Determine the present value if OMR15,000 is to be received at the end of eight years and the…

A: Present value is defined as the concept, which used to state for an funds amount for today, which is…

Q: Boris wants to save $93,000.00 for retirement. He already has $5,580.00, and he will make bi-weekly…

A: Required amount for retirement(FV)  $ 93,000.00 Current amount in account(PV)  $   5,580.00 Time…

Q: You just won the lottery! As your prize you will receive $2,500 a month for 10 years. If you can…

A: To calculate the prize worth today we will use the below formula   Prize worth today =…

Q: You have just won the lottery and will receive $580,000 in one year. You will receive payments for…

A: Data given: Cash flow Year 1 (CF1) =$580000 n=28 years Growth (g)=3% Discount rate (r) =11%…

Q: he $37.7 million lottery payment that you just won actually pays $2.9 million per year for 13 years.…

A: Present value is current value of future cash flow discounted at an appropriate discount rate; in…

Q: The $55.0 million lottery payment that you have just won actually pays $2.2 million per year for 25…

A: The present value represents the current worth of future cash flows, accounting for the time value…

Q: What is the future value of $6000 earning 18% interest, compounded monthly, for 4 years? (Round your…

A: Given information, Present value (PV) = $6,000Annual interest rate (r) = 18% or 0.18Time (t) = 4…

Q: A lottery offers a prize of $750 every week for 5 years. The first payment will be made one week…

A: Given data, annuity Payments A= $750 i = interest rate = 4.4% m = compounding frequency = weekly =…

Q: You've just won a lottery! First, they will transfer to your bank account $2,520,000 immediately.…

A: The concept of money's time worth states that any sum is worth more today than it would be in the…

Q: You just won the lottery! As your prize, you will receive $2,200 a month for 90 months. If you can…

A: Compound = Monthly = 12Payment = p = $2200Time = t = 90 Interest Rate = t = 7 / 12 %

Q: A lottery corporation sells a ticket for a chance to win $500,000. If you win, the prize winnings…

A: Present Value is the current price of future value which will be received in near future at some…

Q: q1-You win a lottery with a prize of $1.5 million. Unfortunately the prize is paid in 10 annual…

A: Value of money decreases with time due to reduction in purchase power and more money is required in…

Q: You have just won the lottery and will receive $610,000 in one year. You will receive payments for…

A: Present value The value of an asset in the market at present is known as its present value. It helps…

Q: How much is the amount due at the end of 5 years if the proceeds are $12,000 and the discount rate…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: The $45 million lottery prize that you have just won actually pays out $4.5 million a year for 20…

A: The topic is related to financial mathematics, more precisely to the process of calculating a cash…