Question
e. Assume that the average price of a new home is $110,000. If new homes are increasing at a rate of 8% per year, how
e. Assume that the average price of a new home is $110,000. If new homes are increasing at a rate of 8% per year, how much will a new home cost in seven years? (Round your answer to 2 decimal places.) f. An investment will pay you $5,500 in 10 years, and it will also pay you $210 at the end of each of the next 10 years (years 1 thru 10). If the annual interest rate is 6%, how much would you be willing to pay today for this type of investment? (Round your intermediate calculations and final answer to the nearest whole dollar.) g. A college student is reported in the newspaper as having won $6,000,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $6.0 million now. Instead she will receive $300,000 at the end of the year for each of the next 20 years. If the annual interest rate is 7%, what is the present value (todays amount) that she won? (ignore taxes). (Round your answer to nearest whole dollar.)
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