Suppose you just won the lottery. Based on the following assumptions, answer the following questions:Quarterly payment of $ 5000Number of years for payments 5Annual Interest rate: 11.0%
Questions:1. What is the present and future value of your winnings? (5 points)Answer: ____PV=_________________________________________________Answer: ___ FV=_________________________________________________
2. Suppose you are saving the money you receive from the lottery authority and you are targeting to accumulate a total of $ 140,000 after five years. You do not have any other income to save. What interest rate is required for you to reach your goal? What is the required effective annual rate?