Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Congratulations you just won Colorado Covid Vaccine Jackpot!!! The cash flows below relate to the yearly annuitized jackpot earnings you will receive. 0 200 1-10

image text in transcribed
Congratulations you just won Colorado Covid Vaccine Jackpot!!! The cash flows below relate to the yearly annuitized jackpot earnings you will receive. 0 200 1-10 300 11-15 400 16-20 0 1. What would JG Wentworth pay if you called 877-Cash-Now and offered to sell your annuity? Assume JG Wentworth wants a 10% annualized rate of return on the investment? 2. You decide to reject the offer from JG Wentworth and instead invest the money in the S&P 500 index. How much would you have in you invested each cash flow into the S&P thirty years from today (time zero)? Assume the S&P 500 would generate a 10% return each year. 3. After calculating the future value of your investments in time thirty, how much could you pull out each year for ten years (year 31-40) if you moved the entire amount into a safer bond fund earning 4% per year. Your withdrawals from the account over the next ten years would leave you with no money in the account at year 41

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

50 + Fun Financial Accounting Cases

Authors: Thomas E. McKee

1st Edition

1257824538, 978-1257824533

More Books

Students also viewed these Accounting questions

Question

Consistently develop management talent.

Answered: 1 week ago

Question

Create a refreshed and common vision and values across Europe.

Answered: 1 week ago

Question

Provide the best employee relations environment.

Answered: 1 week ago