Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have just won the lottery and will receive $500,000 in one year. You will receive payments for 27 years, and the payments will increase

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
You have just won the lottery and will receive $500,000 in one year. You will receive payments for 27 years, and the payments will increase 3 percent per year. If the appropriate discount rate is 11 percent, what is the present value of your winnings? Multiple Choice $5,203,775 $5,420,599 $29,871 $40,847,231 $40,847,231 Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $53,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 5 percent of your annual salary in an account that will earn 10 percent per year. Your salary will increase at 6 percent per year throughout your career. How much money will you have on the date of your retirement 37 years from today? Multiple Choice $1.781,458.07 $1,802,209.28 $1,680,620.82 You are planning to save for retirement over the next 20 years. To do this, you will invest $1,400 a month in a stock account and $1,100 a month in a bond account. The return of the stock account is expected to be 11 percent, and the bond account will pay 6 percent. When you retire, you will combine your money into an account with a return of 9 percent. How much can you withdraw each month from your account assuming a 15-year withdrawal period? Multiple Choice $656,515.12 $17,795.72 $209,361.45 What is the future value of $300 in 21 years assuming an interest rate of 7 percent compounded semiannually? Multiple Choice $1,208.76 $342.21 $1,242.17 $372.47 $1,272.38 The present value of the following cash flow stream is $6,830 when discounted at 10 percent annually. What is the value of the missing cash flow

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

A First Course in Quantitative Finance

Authors: Thomas Mazzoni

1st edition

9781108411431, 978-1108419574

More Books

Students also viewed these Finance questions

Question

Does it do everything the client wanted?

Answered: 1 week ago