Question
In: Finance
You recently learned that you won an online sweepstakes that promises to pay you (or your...
You recently learned that you won an online sweepstakes that promises to pay you (or your designee) $15,000 annually forever. The payments will begin in one year. What is the present value of your winnings if the market rate is 5%
Solutions
jeff jeffy answered 2 years agoRelated Solutions
You’ve just won the lottery which promises to pay you $5,000 per month for the next...
You’ve just won the lottery which promises to pay you $5,000 per
month for the next 30 years, starting in one month. The lottery
company is require to buy US Treasury securities to guarantee that
it can meet its obligation to you. If Treasury securities earned 5%
APR compounded monthly, how much would the lottery company have to
invest today to cover its obligation?
An insurance policy promises to pay you and your heirs $2,500 per year forever, should you...
An insurance policy promises to pay you and your heirs $2,500
per year forever, should you become ill. How much would you pay for
this policy today if the cost of capital (or rate of return) is 6%
and you are factoring 2% growth?
When you retire, your company promises to pay you $1500 a month for 25 years. What...
When you retire, your company promises to pay you $1500 a month
for 25 years. What is the value of this retirement annuity to you
today, assuming 3%?
How much would you be willing to pay today for an investment that promises to pay...
How much would you be willing to pay today for an investment
that promises to pay you pay $26,000 in 35 years if your required
return on the investment is 9% per year?
You recently won $10,000 in your class project competition. Your financial advisor recommends that you invest...
You recently won $10,000 in your class project competition. Your
financial advisor recommends that you invest it in five stocks in
the stock market. Omit all transaction costs Assignment: DUE
Wednesday September 9, 11:59 pm Section A: Use Microsoft Excel Step
1: Copy the tables in Part 1 below. They are in Excel Step 2. Go to
any financial website (I recommend Yahoo Finance) between August 26
and September 4 . Step 3: Choose 5 stocks that have all the...
Your best friend who owns an annuity that promises to pay $1,000 at the end of...
Your best friend who owns an annuity that promises to pay $1,000
at the end of each year, for 20 years, comes to you and offers to
sell you all of the payments to be received after the 10th year for
a price of $7,000. With an APR of 2.3% compounded quarterly, should
you pay the $7,000 today to receive payment numbers 11 and onwards?
Additionally, is he/she a good friend? Justify your answer (Note:
If you buy the annuity,...
You are considering an investment that promises to pay $500every week for 2 years with...
You are considering an investment that promises to pay $500
every week for 2 years with the first payment made immediately. If
the opportunity cost of the investment is 10% p.a. compounded
quarterly, what is the investment’s value today?
Someone promises to pay you $1,000,000 every year (at the end of the year) for the...
Someone promises to
pay you $1,000,000 every year (at the end of the year) for the next
15 years. The first payment will be one year from today. The
relevant effective annual interest rate is 7.0%. What does the time
line look like for this problem? What would you pay, today, for
this promise?
For
this we have to calculate the present value of the total cash
inflow at interest rate of 7% for 15 years formula for this =...
Someone promises to pay you $1,000,000 every year (at the end of the year) for the...
Someone promises to pay you $1,000,000 every year (at the end of
the year) for the next 15 years. The first payment will be one year
from today. The relevant effective annual interest rate is 7.0%.
What does the time line look like for this problem? What would you
pay, today, for this promise?
You have just deposited $8,500 into an account that promises to pay you an annual interest...
You have just deposited $8,500 into an account that promises to
pay you an annual interest rate of 6 percent each year for the next
6 years. You will leave the money invested in the account and 10
years from today, you need to have $19,320 in the account. What
annual interest rate must you earn over the last 4 years to
accomplish this goal?
Multiple Choice
14.07%
11.37%
10.01%
12.51%
11.55%
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