In the Million Dollar Lottery, a winner is paid a million dollars at the rate of $50,000
Question:
In the “Million Dollar Lottery,” a winner is paid a million dollars at the rate of $50,000 per year for 20 years. Assume that these payments form an ordinary annuity and that the lottery managers can invest money at 6% compounded annually. Find the lump sum that the management must put away to pay off the “million dollar” winner.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 70% (10 reviews)
We want to find the present value of an annuity of 50000 per year for 20 ...View the full answer
Answered By
Stephen ouma
I have worked with different academic writing companies such as wriredom, writerbay, and Upwork. While working with these companies, I have helped thousands of students achieve their academic dreams. This is what I also intend to do here in SolutionInn
4.90+
19+ Reviews
63+ Question Solved
Related Book For
Question Posted:
Students also viewed these Mathematics questions
-
An investment offers $10,000 per year for 20 years. If an investor can earn 8 percent annually on other investments, what is the current value of this investment? If its current price is $120,000,...
-
A lease involves payments of $10,000 per year for 20 years. The payments are made at the end of each year. The lease does not involve a guaranteed residual value. The appropriate interest rate is 7%...
-
An investment offers $6,200 per year for 20 years, with the first payment occurring one year from now. If the required return is 7 percent, what is the value of the investment? What would the value...
-
Suggest two strategies for the company to minimise the impact of the strike on business operation?
-
Interview an operations manager at a nearby manufacturing or service company to find out about scheduling problems the company faces and how they are addressed.
-
On July 1, 20Y1, Danzer Industries Inc. issued $50,000,000 of 10-year, 8% bonds at a market (effective) interest rate of 10%, receiving cash of $43,768,920. Interest on the bonds is payable...
-
Prospect Oil Company sold a total of 1,000 Mcf of gas at $9.00/Mcf. The lease provides a 1/5 RI. The working interest owner receives 100% of the revenues (net of 5% severance tax) and then...
-
Ottey Corporation issued $4 million of 10-year, 7% callable convertible subordinated debentures on January 2, 2017. The debentures have a face value of $1,000, with interest payable annually. The...
-
Events Independent Dependent Experiment A hat contains slips of paper with the names of boys and girls in a class. A name is randomly selected and returned to the hat. The slips of paper are mixed....
-
One technique for limiting fault current is to place reactance in series with the generators. Such reactance can be modeled in PowerWorld Simulator by increasing the value of the generator's positive...
-
Find the following limit, which is the first one given by lHospital in his calculus text Analysis of Infinitely Small Quantities for the Understanding of Curves, published in 1696. lim xa 2ax - x -...
-
Use the Taylor series given in the text to find the Taylor series for the functions defined as follows. Give the interval of convergence of each series. (x) = x 6 e -x
-
The price of Myrtles Plumbing Supply Co. is now $80. The company pays no dividends. Ms. Bossard expects the price 4 years from now to be $110 per share. Should she buy Myrtles Plumbing stock if she...
-
Explain the challenges companies face in managing and protecting their intangible assets in a rapidly changing business environment.
-
2. Brand Implementation Audit 1. Marketing Mix (Give answer for Apple) A) How is the brand architecture? B) What are the products and sub-brands? C) How are they priced? D)Are they delivered to the...
-
You expect to earn 6% while retired. What is the most you can take out each year and have enough for yourself and a small amount of an inheritance for your children?
-
A company has $ 1 0 0 of cash at the beginning of 2 0 2 2 . The statement of Cash Flows for the year ended December 3 1 , 2 0 2 2 , shows total net cash inflow of $ 4 0 0 . The income statement for...
-
A machine costing $50 000 has an estimated useful lifetime of 20 years and a scrap value of $2000 at that time. Determine the accumulated depreciation and the book value of this asset at the end of 9...
-
Maria Cantu was a special education teacher under a one-year contract with the San Benito School district for the 1990-1991 school year. On Saturday, August 18, just weeks before fall-term classes...
-
Vectors are drawn from the center of a regular n-sided polygon in the plane to the vertices of the polygon. Show that the sum of the vectors is zero.
-
Perform a test to compare the success rate of undiluted vaccine vs. 1:100 diluted vaccine. Report a two-tailed p-value? Infectious Disease Smallpox vaccine is highly effective in immunizing against...
-
Perform a test to assess whether the success rate is a function of the log 10 (dilution ratio). Report a two-tailed p-value. [For the 1:10 group, log 10 (dilution ratio) = log 10 (1/10) = 1, . . . ,...
-
What test can be used to compare the cytotoxic T-cell response of the undiluted group vs. the 1:100 diluted group? A more quantitative measure of efficacy was the cytotoxic T-cell response. The...
-
_______________: The seller agrees to accept a percentage of the sales price and stays on to manage the business for a few more years under the new owner; the remaining portion of the price is...
-
Private, not-for-profit colleges and universities must have a Statement of Financial Position, Statement of Activities, Statement of Cash Flows, and Notes to the Financial Statements included in...
-
You have just been hired into a management position which requires the application of your budgeting skills. You find out that budgeting has not been a priority of the company. You have contacted...
Study smarter with the SolutionInn App