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??? 13) Jia has just won a $20 million lottery, which will pay her S1 million at the end of each year for 20 years.
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13) Jia has just won a $20 million lottery, which will pay her S1 million at the end of each year for 20 years. An investor has offered her $10 million for this annuity. She estimates that she can earn 10 percent interest, compounded annually, on any amounts she invests. She asks your advice on whether to accept or reject the offer. What will you tell her? (Ignore Taxes) 14) S100 is received at the beginning of year 1.8200 is received at the beginning of year 2, and $300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is A) $1,536 B) S 672 C) $ 727 D) $1,245 15) The present value of a $20,000 perpetuity at a 7 percent discount rate is 7 A) S186,915 B) $285,714 C) $140,000 D) $325,000 16) Dan plans to fund his individual retirement account (IRA) with the maximum contribution of $2,000 at the end of each year for the next 10 years. If Dan can carn 10 percent on his contributions, how much will he have at the end of the tenth year? A) $12,290 B) S20,000 C) $31,874 D) $51,880 17) The future value of a $10,000 annuity due deposited at 12 percent compounded annually for Step by Step Solution
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