A lottery claims its grand prize is $10 million, payable over five years at $2,000,000 per year.

Question:

A lottery claims its grand prize is $10 million, payable over five years at $2,000,000 per year. If the first payment is made immediately, what is this grand prize really worth? Use an interest rate of 6%.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

The Economics of Money Banking and Financial Markets

ISBN: 978-0321785701

5th Canadian edition

Authors: Frederic S. Mishkin, Apostolos Serletis

See More Books

Question Posted: Nov 09, 2018 11:50 AM

See More Questions

A lottery claims its grand prize is $10 million, payable over 20 years at $500,000 per year. If the first payment is made immediately, what is this grand prize really worth? Use an interest rate of...
Thompson Limited, a private company with no published credit rating, completed several transactions during 2017. In January, the company bought under contract a machine at a total price of $1.2...
Thompson Limited (a private company with no published credit rating) completed several transactions during 2011. In January, the company purchased under contract a machine at a total price of $1.2...
Simplify each expression. Assume that all variables represent nonzero real numbers. (xy-3)-2
An electric field E and a magnetic field B have the same energy density. (a) Express the ratio E / B in terms of the fundamental constants 0 and 0. (b) Evaluate E / B numerically, and compare your...
(Weighted average cost of capital) Crawford Enterprises is a publicly held company located in Arnold, Kansas. The firm began as a small tool and die shop but grew over its 35-year life to become a...
How has the initial player responded to the competitive_ challenge?LO1
Given the aggression scores below for Outcome A of the sleep deprivation experiment, verify that, as suggested earlier, these mean differences shouldnt be taken seriously by testing the null...
To complete the unit sales forecast, use the third, fourth, fifth and sixth digits of your student identification number to fill in the blanks. If any of these digits contains a "O", use "3" instead....
There is a lottery with n coupons and n people take part in it. Each person picks exactly one coupon. Coupons are numbered consecutively from 1 to n, n being the maximum ticket number. The winner of...
If the interest rate is 10%, what is the present value of a security that pays you $1100 next year, $1210 the year after, and $1331 the year after that?
Go to the CANSIM data available in the Student Resources section of your MyEconLab website and download monthly data since 1953 for the three-month T-bill rate (series V122541) and the total consumer...
Bill and Mary plan co marry in December 2018. Bill's salary is $105,000 and he owns his residence. His itemized deductions total $19,000. Mary's salary is $86,000. Her itemized deductions total only...
how could playing in a sandbox help to the development of children? how could a garden help to the development of children? how could playground obstacle courses like a pebble bridge and monkey bars...
A store order bottles of shampoo throughout the year. Over time, the store has learned that the annual demand D for shampoo is constant, i.e., there is no variability. Currently, the store decides to...
Solve the Practice #2 == where L2 =02A = a, L404B = c, L = 0204 = d, y = /2 1) Find the velocity 3 when 82 = /2 and 6 = 0.4 rad/s 2) Find the acceleration 63 when = /2 and 62 = 0.4 rad/s 03. 03 Y B...
.0.5 0.5 For the above plot of the ellipsoid (22) 2- + +() + (-) = 1, find the parameters a, b and c. Note that a, b and c are positive integers between 1 and 6 inclusive. Use the mouse to rotate the...
The annual energy consumption of the University of Maryland is 100 million kWh. How much Uranium-235 is needed to produce this amount of energy in a nuclear power plant assuming 100% efficiency? (The...
Describe the major characteristics that impact inventory decisions. One of the first steps in analyzing an inventory problem should be to describe the essential characteristics of the environment and...
Use the graphs of f and g to graph h(x) = (f + g) (x). To print an enlarged copy of the graph, go to MathGraphs.com. 1. 2. y 24 8. 2. -2 -2 4 6
Central banks that engage in inflation targeting usually announce the inflation target and time period for which that target will be relevant. In addition, central bank officials are held accountable...
Suppose the statistical office of a country does a poor job in measuring inflation and reports an annualized inflation rate of 4% for a few months, while the true inflation rate has been around 2.5%....
How does a credible nominal anchor help improve the economic outcomes that result from a positive aggregate demand shock? How does a credible nominal anchor help if a negative aggregate supply shock...
American Food Services, Incorporated leased a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1 , 2 0 2 4 . The lease...
Which of the following statements is true? Financial measures tend to be lag indicators that report on the results of past actions. LA profit center is responsible for generating revenue, but it is...
Andretti Company has a single product called a Dak. The company normally produces and sells 8 0 , 0 0 0 Daks each year at a selling price of $ 5 6 per unit. The company s unit costs at this level of...

A lottery claims its grand prize is $10 million, payable over five years at $2,000,000 per year.

Question:

Step by Step Answer:

In present value terms t...View the full answer

The Economics of Money Banking and Financial Markets

Students also viewed these Business questions