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After hearing a knock at your front door, you are surprised to see the Prize Patrol from your state's online lottery agency. Upon opening your
After hearing a knock at your front door, you are surprised to see the Prize Patrol from your state's online lottery agency. Upon opening your door, you learn you have won the lottery of \$12.5 million. You discover that you have three options: (1) you can receive \$1.25 million per year for the next 10 years, (2) you can have $10 million today, or (3) you can have $4 million today and receive $1 million for each of the next eight years. Your lawyer tells you that it is reasonable to expect to earn an annual return of 10 percent on investments. Required: 1. What is the present value of the above options? (FV of $1, PV of $1, FVA of $1, and PVA of $1 ) Note: Use appropriate factor(s) from the tables provided. 2. Which option do you prefer? Complete this question by entering your answers in the tabs below. What is the present value of the above options? Note: Enter your answers in whole dollar not in millions (i.e., 1,000,000 not 1.0), rounded to nearest whole dollar. At the end of each year, you plan to deposit $2,000 in a savings account. The account will earn 9 percent annual interest, which will be added to the fund balance at year-end. The first deposit will be made at the end of Year 1. (FV of $1,PV of $1,FVA of $1, and PVA of $1 ) Note: Use the appropriate factor(s) from the tables provided. Required: 1. Assume you follow GAAP. Prepare the required journal entry at the end of Year 1. 2. What will be the balance in the savings account at the end of the 10th year (i.e., after 10 deposits)? 3. What is the interest earned on the 10 deposits? 4. How much interest revenue did the fund earn in the second year? In the third year? 5. Assume you follow GAAP. Prepare the all required journal entries at the end of the second and third years. Answer is not complete. Complete this question by entering your answers in the tabs below. Assume you follow GAAP. Prepare the required journal entry at the end of Year 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) At the end of each year, you plan to deposit $2,000 in a savings account. The account will earn 9 percent annual interest, which will be added to the fund balance at year-end. The first deposit will be made at the end of Year 1. (FV of \$1, PV of \$1, FVA of \$1, and PVA of $1 ) Note: Use the appropriate factor(s) from the tables provided. Required: 1. Assume you follow GAAP. Prepare the required journal entry at the end of Year 1. 2. What will be the balance in the savings account at the end of the 10th year (i.e., after 10 deposits)? 3. What is the interest earned on the 10 deposits? 4. How much interest revenue did the fund earn in the second year? In the third year? 5. Assume you follow GAAP. Prepare the all required journal entries at the end of the second and third years. Answer is not complete. Complete this question by entering your answers in the tabs below. 2. What will be the balance in the savings account at the end of the 10 th year (i.e., after 10 deposits)? 3. What is the interest earned on the 10 deposits? (Round your answer to the nearest whole dollar.) At the end of each year, you plan to deposit $2,000 in a savings account. The account will earn 9 percent annual interest, which will be added to the fund balance at year-end. The first deposit will be made at the end of Year 1. (FV of \$1, PV of \$1, FVA of \$1, and PVA of \$1) Note: Use the appropriate factor(s) from the tables provided. Required: 1. Assume you follow GAAP. Prepare the required journal entry at the end of Year 1. 2. What will be the balance in the savings account at the end of the 10th year (i.e., after 10 deposits)? 3. What is the interest earned on the 10 deposits? 4. How much interest revenue did the fund earn in the second year? In the third year? 5. Assume you follow GAAP. Prepare the all required journal entries at the end of the second and third years. Answer is not complete. Complete this question by entering your answers in the tabs below. How much interest revenue did the fund earn in the second year? In the third year? (Round your answer to the nearest whole dollar.) added to the fund balance at year-end. The first deposit will be made at the end of Year 1. (FV of $1, PV of $1, FVA of $1, and PVA of $1 ) Note: Use the appropriate factor(s) from the tables provided. Required: 1. Assume you follow GAAP. Prepare the required journal entry at the end of Year 1. 2. What will be the balance in the savings account at the end of the 10th year (i.e., after 10 deposits)? 3. What is the interest earned on the 10 deposits? 4. How much interest revenue did the fund earn in the second year? In the third year? 5. Assume you follow GAAP. Prepare the all required journal entries at the end of the second and third years. Answer is not complete. Complete this question by entering your answers in the tabs below. Assume you follow GAAP. Prepare the all required journal entries at the end of the second and third years. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) You are a financial adviser working with a client who wants to retire in eight years. The client has a savings account with a local bank that pays 9 percent annual interest. The client wants to deposit an amount that will provide her with $1,000,000 when she retires. Currently, she has $300,000 in the account. (FV of $1, PV of $1, FVA of $1, and PVA of $1 ) Note: Use the appropriate factor(s) from the tables provided. Required: How much additional money should she deposit now to provide her with $1,000,000 when she retires? Note: Round your answer to nearest whole dollar
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