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You just won the lottery for $79,000,000. The lottery offers a choice of either getting a lump sum payment (a chunk of money now, less
You just won the lottery for $79,000,000. The lottery offers a choice of either getting a lump sum payment (a chunk of money now, less than the 79mm), or receiving 23 equal and annual payments over the next 23 years, with the rst payment coming at the end of the year. Assume an interest rate of 7.5%. You're trying to decide whether its better to take the lump sum, or the annual payments. What is the minimum amount that lump sum must be worth to be worth taking the lump sum payment (use your calculator) Joe deposits $2,000 every year, at the BEGINNING of the year into an account that pays 9% annually. What will that account be worth in four years, compounding annually? Suppose we would like our account to grow to $5500 at the end of 8 years, and we have an investment that will grow by 7%. How much do I have to put into the account each year, at the end of the year to get to that number/ (use calculator) XYZ plans to issue bonds that pay no interest but will be worth par at maturity, which is seven years from the issue date. To price these bonds competitively with other bonds of equal risk its determined they should yield 10% compounded annually. At what price should XYZ issue these bonds
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