Your student loan requires you to make four annual payments at the end of each of the next 4 years of $75,000 each to your bank. The bank manager calls you and offers to allow you to skip making the next three payments and only make one final payment (let's say of $X) at the end of 4 years. If the market interest rate is 10%, how much should you pay to the bank at the end of 4 years (i.e., what should $X be) so that the bank is indifferent between receiving: (a) 4 payments of $75,000 over each of the next 4 years and (b) $X in 4 years None of the above $236,603.10 $237,739.91 $348,075.00 Suppose you win the Powerball Lottery with $202 million jackpot prize. The money is paid in equal installments over a 40 year period. The appropriate discount rate is 15%. An investor proposes to buy this "winning ticket" from you. The amount you should charge the investor for the winning ticket is: $13,416,392.31 $33,540,980.78 $13,466,666.67 $22,360,653.85 One year from now an annuity will pay you $500. Thereafter, in each of the next 4 years (i.e., in years 2, 3, 4, and 5) the payments will increase by 10% each year. If the market interest rate is 8%, then the maximum amount that you would be willing to pay for this annuity is: $2,191.57 $2,402.15 $1,996.36 OO Cannot be determined The appropriate market interest rate is 12%. An investment pays you $625 per year starting one year from now and this payment will grow at the rate of 7% per year. The payments will last for the 50 years. The present value of these payments is closest to: $11,225.92 $5,190.31 $12.456.75 O $11,013.72