answer fully

1)

A,B

2)

3

c,D,E,D,E

1. Congratulations! You have just won the lottery and here elected to reace $50,000 per year fer 20 FERTS. Assume flet 4 percent interest rate is used to saluate the marity and fun you receive each payment at the beginning of the year. What is the present value of the lottery? b. Her noch interest is earned the present valme te make the $50,000 per year payment? a 2. Calculate the monthly mortgage payment made at the beginning of each month on a $100,000 mortgage. The mortgage is for 15 years and the interest rate is 5.5 percent. 3. Tom and Mary James just had a baby. They beard that the cost of providing a college education for this baby will be $100,000 in 18 years. Tom normally receives a Christmas bonus of $4,000 every year in the paycheck prior to Christmas. He read that a good stock mutual fund should pay him an average of 10 percent per year. Tom and Mary want to make sure their son has $100,000 for college. Consider each of the following questions. How much does Tom bare to invest in this mutual fund at the end of each year to have $100,000 in 18 years? C d If the bonus is not paid until the first of the year, how much does Tom hare to invest at the beginning of each year to have $100,000 in 18 years? Tom's father said he would provide for his grandson's education. He will put $10,000 in a government bond that pays 7 percent interest. His dad said this should be enough. Do you agree? d If Mary has a savings account worth $50,000, how much will she have to withdrew from savings and set aside in this mutual fund to have the $100,000 for her son's education in 18 years? If Mary has been advised to keep the $50.000 in her savings account earning 4 percent compounded monthly, how much additional money will she have to set aside in the stock mutual fund to have the $100,000 for her son's education in 18 years? e