What do you think about the Tri-State Megabucks lottery discussed in the chapter advertising a $500,000 prize when the lump sum option is $250,000? Is it deceptive advertising?
Answer to relevant QuestionsWhat happens to the future value of a perpetuity if interest rates increase? What if interest rates decrease?An investment offers $6,100 per year for 15 years, with the first payment occurring one year from now. If the required return is 6 percent, what is the value of the investment? What would the value be if the payments ...Find the EAR in each of the followingcases:Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,500 monthly. The contract currently sells for $115,000. What is the monthly return on this investment vehicle? What is the APR? The effective ...A 15-year annuity pays $1,750 per month, and payments are made at the end of each month. If the interest rate is 10 percent compounded monthly for the first seven years, and 6 percent compounded monthly thereafter, what is ...
Post your question