Question
Please help me answer these EQUIVALENT PAYMENTS PROBLEMS Question 1 of 5 Jacob won a lottery that would pay him $40,000 in 2 years and
Please help me answer these EQUIVALENT PAYMENTS PROBLEMS
Question 1 of 5
Jacob won a lottery that would pay him $40,000 in 2 years and $8,300 in 6 years. The lottery company had another option where he could get an upfront amount now and another $9,800 in 2 years.
Calculate the upfront amount that he would receive now from the second option, assuming that money is worth 4.00% compounded semi-annually.
$_______
Round to the nearest cent
Question 2 of 5
Brian was supposed to make a payment of $3,750 in 1 year and another payment for $1,500 in 6 years to Maroon Inc. as part of a payment plan. Instead, he is trying to reach an agreement with the company where he would settle both payments in 5 years. Assume that money is worth 3.83% compounded semi-annually.
a. Calculate the equivalent value of the $3,750 payment and the $1,500 payment today.
$_____
Round to the nearest cent
b. Calculate the size of the payment required in 5 years to settle the amount.
$______
Round to the nearest cent
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started