Answered step by step
Verified Expert Solution
Question
1 Approved Answer
your dreams of becoming rich have just come true. You have won the state of tranquility's lottery. The state offers you to payment plans for
your dreams of becoming rich have just come true. You have won the state of tranquility's lottery. The state offers you to payment plans for 4,000,000 advertise jackpot. you can take annual payments of $100,000 at the wnd of the year for 40 years or $1,333,171 today.
a. If your investment rate over the next 40 years is 8%, which payoff will you choose? b. If your investment rate over the next 40 years is 6%, which payoff will you choose? c. At what investment rate will the annuity stream of $100,000 be the same as the lump-sum payment of $1,333,171? a. If your investment rate over the next 40 years is 8%, what is the present value of the $100.000 annual payments today? (Round to the nearest dollar) plz help with a,b, c
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