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11. Part 1- your best freind won the lottery. she has a choice of 15,900,000 today or an annunity with payments or 1,750,000 for 20
11. Part 1- your best freind won the lottery. she has a choice of 15,900,000 today or an annunity with payments or 1,750,000 for 20 years wirh the first payment coming one yeat from today. what rate of return is built into annunity. disregard any tax consequences.
part b- Jim sold a car and accepted a note promising cash flows or 1,000 at the end of year 1 and 2,000 at the end of year 2,3 and 4. what was the effective price he received for the car assuming an interest rate or 7.10%
part c- Bill paid for an investmmet that promises to pay 750 at the end of each of the next 5 years then an additional lump sum payment of $17,150 at the end of the 5th year. what is the expexted rate of return on this investment.
PLEASE ANSWER ALL PARTS. THANKS!!
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