Question: if you won a 1000.000 scratch ticket from the mass lottery and they offered you either 20 annual payment of $50,000 or a lump sum

if you won a 1000.000 scratch ticket from the mass lottery and they offered you either 20 annual payment of $50,000 or a lump sum payment, how much would the lump sum have to be so that it is equivalent to the $50,000 annual payment stream assuming the current interest rate is %4?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

An interesting biological experiment (see [Schr2]) concerns the determination of the maximum water temperature, XM, at which various species of hydra can survive without shortened life expectancy....

If you won a $1,000,000 scratch ticket from the Massachusetts lottery and they offered you either 20 annual payments of $50,000 or a lump sum payment, how much would the lump sum have to be so that...

18. What age is used to compute the taxable amount of the pension using the Simplified Method? 19. Kenneth and Martha must repay $21,613 of the Advance Premium Tax Credit. a. true b. false 20. How...

hello there i would like some help with my finance corportae question Congratulations! You have just won a small lottery. It will pay you either 5 annual payments of $15,000 each (with the first...

CONFIDENTIAL BPA120] BPA10101 Q1 There are three major concerns of macroeconomics which are output growth, unemployment and inflation. Government policy makers would like to have high output growth,...

PowerPoint Assignment for BUS 401: Principles of Finance You have been asked by a manager in your organization to put together a training program explaining Net Present Value (NPV) and Future Value...

A good application of the time value of money is the lottery problem. If you won a $6 million lottery, would you take the lump sum or annuitize it over 20 years? The article below addresses that...

Please help me with questions 1-18 , has to be in Excel 6.1. Future value with multiple cash flows: Konerko, Inc., expects to earn cash flows of $1 years. If the company uses an 8 percent discount...

please show how to input in the Financial Calculator ! not by the formulas Annis Ciot, you on the lateytt The award was fo.600. The trychaffered to the the entiert over 40 years $1,000,000 per year,...

I am wondering if anyone has corrected solutions to fnce 300 assignments 1 2 and 3. I am concered about my answers and would love to compare. Pretty sure on my answers for 1 and 2 mainly interested...

MULTIPLE CHOICE 1 Using the recurrence relation t0 = 8, tn+1 = tn + 9, the sixth term would be: A 2 15 B 17 C 23 D 53 E 62 A canoe costs $40 to hire for the first day and $30 for each extra day. If...

A car moving with uniform acceleration covers 450 m in a 5 second interval, and covers 700 m in the next 5 seconds interval. The acceleration of the car is (a) 7 m/s (c) 25 m/s (b) 50 m/s (d) 10 m/s

5. Fill in the missing items for each of the cases below: (Use a financial calculator or a spreadsheet application when necessary to make the appropriate calculations. Round all intermediary and...

Which of the following statements are correct with respect to the buyer and the counting of inventory? The buyer should include items that are shipped FOB destination that are in transit but have not...

During 2020, the cash account of Gonzales Car Wash Company was affected by receipts collected from clients, P120,000; proceeds from sale of used cleaning equipment, P3,500; proceeds from a bank loan,...