You have just won the lottery and you will receive 20 annual beginning-of-year payments of $5 million each. If you expect to earn a 9% compounded semi-annually, what will be the current value of the lottery payments? *

a) $67,966,468

b) $47,986,467

c) $97,211,422

d) $27,956,468

e) None of the above

You have just applied for a job contract at Zoom Company. This company will pay you $75 at the end of the first year, $225 at the end of the second year, and $300 at the end of the fourth year. Currently you have a saving account in the bank that pays you a rate of 8% compounded annually. What is the future value of such contract at the end of the fourth year? *

a) $1,000

b) $300

c) $657

d) $557

e) None of the above

Assume that you will receive $2,000 a year in Years 1 and 2, zero dollars in year 3, $4,000 a year in Years 4 and 5, and $3,000 in Year 6, with all cash flows to be received at the end of the year. If you require a 14 percent rate of return. You will accumulate (future value) at end of year 6: *

a) $ 9,851

b) $13,250

c) $11,714

d) $18,547

e) None of the above