Question: John Jones won a lottery that will pay him $4,000,000 after twenty years. Assuming an appropriate interest rate is 5% compounded annually, what is the

John Jones won a lottery that will pay him $4,000,000 after twenty years. Assuming an appropriate interest rate is 5% compounded annually, what is the present value of this amount?

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!

How will you determine what level of attainment a participant should earn for each quarter? Select one: O a. The participant will state that they know how to complete the skill. O b. The participant...

1. 2. Concept: Compound Interest Let's say you have $100, and find out you can earn 10% interest on your $100 for 10 years. You might think: "Okay, so 10% of $100 is $10. If I get $10 every year for...

I need these multiple choice problems for Accounting ACC 610 Financial Reporting 1 complete as soon as possible. Please reply urgently. Thanks!! (83.) At Ruth Company, events and transactions during...

known future value 7. Present value is a the value now of a future amount the amount that must be invested now to produce a know C always smaller than the future value. d all of these and the present...

2. Barber Company will receive $900,000 in 7 years. If the appropriate interest rate is 10%, the present value of the $900,000 receipt is a. $459,000. b. $461,842. c. $1,359,000. d. $1,753,848....

Answer each of the following independent questions. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $86,000 cash immediately, (2) $32,000 cash...

Packard Corporation reports the following information: Net cash provided by operating activities $235,000 Average current liabilities 150,000 Average long-term liabilities 100,000 Dividends paid...

Calculate the present value of $500,000 to be received in 7 years assuming an annual interest rate of 6%, compounded monthly. Calculate the future value of $13,500 invested for 10 years assuming an...

Answer each of the following independent questions. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $90,000 cash immediately, (2) $35,000 cash...

Answer each of the following independent questions. Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $64,000 cash immediately, (2) $20,000 cash...

Question 1: The formula number answers for PV= and NPV = each questions: Z AD M R S T U v w X Y AC AE AF AA AB N P Q B D 152 9b. How would your answer change if you made withdrawals at the beginning...

Ratios and Fixc4 Assets The Richmond Company has a long-term debt ratio of .60 and a current ratio of 1:30. Current liabilities are $980, sales are $5,105, profit margin is 95 percent, and ROE is...

You work for a software company that aims to outsource some of its software development to a foreign supplier. At present, you are considering three countries: Hungary, Mexico, and Russia. You need...

Date Adjusted Close19-Apr-17 74.4320-Apr-17 78.8421-Apr-17 78.4124-Apr-17 79.2625-Apr-17 79.4426-Apr-17 79.3327-Apr-17 79.1428-Apr-17 78.081-May-17 78.062-May-17 78.363-May-17 77.674-May-17...

Bash Shell Scripting 1) List files where third letter is a or c, how you can achieve this in bash?