Question $1.$ Lottery Monthly PV $($due$)$

You just won the lottery! As your prize you will receive $$4,340$ a month for $169$ months starting today. If you can earn $14\%$ APR, compounded monthly, on your money, what is this prize worth to you today? $392898\mathrm{.}20$ is not a correct answer

Question $2.$

Christina is planning on buying an insurance policy that will pay for $$124,750$ a year for $25-$years, with the first payment occurring in $15$ years, if she is still alive, otherwise the policy will payout a lump sum to her heirs at the end of year $14.$ The rate of return on the policy is$8\mathrm{.}25$ percent?

What is the value of the lump payout?

If Christina purchases the policy, what is the maximum she is willing to pay?

QUESTION $3$

Consider a $4-$year amortizing loan. You borrow $$488,000$ initially, and repay it in four equal annual year$-$end payments.

a$.$

If the interest rate is $5\mathrm{.}64\%,$ calculate the annual payment. $($Do not round intermediate calculations. Round your answer to $2$ decimal places.$)$

Annual payment $

$139673\mathrm{.}5082$

b$.$

Prepare an amortization schedule. $($Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Do not round intermediate calculations. Round your answers to $2$ decimal places.$)$

Time Loan

Balance Year$-$End Interest

Due on Balance Year$-$End

Payment Amortization

of Loan

$0$ $

$488000$

$

$27523\mathrm{.}2$

$

$$139,673\mathrm{.}51$

$

$$112,150\mathrm{.}31$

$1$

$($$$375,849\mathrm{.}69)$

$($$$21,197\mathrm{.}92)$

$$139,673\mathrm{.}51$

$2$

$$139,673\mathrm{.}51$

$3$

$$139,673\mathrm{.}51$

$4$

c$-1.$

What is the loan balance at the end of year $1?($Do not round intermediate calculations. Round your answer to $2$ decimal places.$)$

Loan balance $

c$-2.$

Is it the present value of the remaining loan payments?