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Your wealthy neighbor has promised to give you $1,000 a year at the end of each of the next four years to help with college.
Your wealthy neighbor has promised to give you $1,000 a year at the end of each of the next four years to help with college. Using a discount rate of 10%, the present value of the gift can be stated as O A. PV = $1,000 x 10% x 5. O B. PV = $1,000 (Annuity PV factor, i = 10%, n = 4) O C. PV = $1,000 (PV factor, i = 5%, n= 4). OD. PV = $1,000 (Annuity FV factor, i = 10%, n = 4). On a whim you purchased a scratch-off lottery ticket at the gas station. It must have been your lucky day because you won $2,500,000. Being logical and rational you decide to invest the money at 2% for 12 years until you are ready to start a family. At the end of 12 years, how much will your investment be worth? (Click the icon to view the future value of $1 table (Click the icon to view the futu 0 Data Table O A. $3,170,000 O B. $1,970,000 OC. $3,235,000 OD. $33,530,000 Future Value of $1 Periods 10 11 121 131 14 15 2% A3% E4%E5% 1.219 1.344 1 .480 1.629 1.243 1.384 1.539 1.710 .2681 . 4261 .601 1.796 .2941 .469 1665 1886 1.319 1.513 1.732 1.346 1.558 1.801 2 .079 1.898 2012 2133 2 261 2.397 0 Data Table Future Value of Annuity of $1 Periods 2% 10 10.950 11 12.169 12 13.412 13 14.680 14 15 974 17.293 11.464 12 BOR 14.192 15.618 17 086 18.599 45% 12.006 12 578 13.486 14 207 15.026 15.917 16.627 17 713 18.292 19.599 20.024 14.972 16 870 18 882 21.015 23 276 Click to select your answer 21 579
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