You have just won the Powerball lottery worth $480 million. The rule is that this is...
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You have just won the Powerball lottery worth $480 million. The rule is that this is to be paid out over 30 years at $16 million per year starting immediately. The cash option before taxes is equal to the present value of this 30-year $16 million annuity. Suppose the Lottery is currently discounting at 8%. What is the gross amount you will receive if you elect the cash option? You loan someone $4,500 with the understanding that they will repay you in 3 years $5,500. What is the yield to maturity on this simple loan? You have just agreed to purchase a home for $500,000. You will put 25% down and finance $375,000 for 30 years at a fixed rate of 7%. What is the required monthly payment covering just the principal and interest? You have just borrowed $200,000 and have agreed to repay $1,301.19 per month for the next 360 months. What is the annual yield to maturity for this fixed-payment loan? You have just won the Powerball lottery worth $480 million. The rule is that this is to be paid out over 30 years at $16 million per year starting immediately. The cash option before taxes is equal to the present value of this 30-year $16 million annuity. Suppose the Lottery is currently discounting at 8%. What is the gross amount you will receive if you elect the cash option? You loan someone $4,500 with the understanding that they will repay you in 3 years $5,500. What is the yield to maturity on this simple loan? You have just agreed to purchase a home for $500,000. You will put 25% down and finance $375,000 for 30 years at a fixed rate of 7%. What is the required monthly payment covering just the principal and interest? You have just borrowed $200,000 and have agreed to repay $1,301.19 per month for the next 360 months. What is the annual yield to maturity for this fixed-payment loan?
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Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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