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You won the lottery and have a couple of choices as to how to take the money. Which choice yields a greater present value? Present Value of $1 Periods 45 6769 8 Present Value of Annuity of $1 Periods 5% 3.546 4.329 5.076 456000 7 8 5% 0.823 0.784 0.746 0.711 0.677 0.645 9 5.786 6.463 7.108 6% 0.792 0.747 0.705 0.665 0.627 0.592 6% 3.465 4.212 4.917 5.582 6.210 6.802 8% 0.735 0.681 0.630 0.583 0.540 0.500 8% 3.312 3.993 4.623 5.206 5.747 6.247 10% 0.683 0.621 0.564 C. $85,000 (lump sum) 7 years from now using a 6% discount rate O D. $80,000 (lump sum) 7 years from now using an 8% discount rate 0.513 0.467 0.424 10% 3.170 3.791 4.355 4.868 5.335 5.759 A. $7,000 a year at the end of each of the next 6 years using a 6% discount rate B. $53,500 (lump sum) now using a 6% discount rate You won the lottery and have a couple of choices as to how to take the money. Which choice yields a greater present value? Present Value of $1 Periods 45 6769 8 Present Value of Annuity of $1 Periods 5% 3.546 4.329 5.076 456000 7 8 5% 0.823 0.784 0.746 0.711 0.677 0.645 9 5.786 6.463 7.108 6% 0.792 0.747 0.705 0.665 0.627 0.592 6% 3.465 4.212 4.917 5.582 6.210 6.802 8% 0.735 0.681 0.630 0.583 0.540 0.500 8% 3.312 3.993 4.623 5.206 5.747 6.247 10% 0.683 0.621 0.564 C. $85,000 (lump sum) 7 years from now using a 6% discount rate O D. $80,000 (lump sum) 7 years from now using an 8% discount rate 0.513 0.467 0.424 10% 3.170 3.791 4.355 4.868 5.335 5.759 A. $7,000 a year at the end of each of the next 6 years using a 6% discount rate B. $53,500 (lump sum) now using a 6% discount rate
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Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
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