You must make a payment of $1,000 in 10 years. To get the money for this...

 

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You must make a payment of $1,000 in 10 years. To get the money for this payment, you will make 5 equal deposits, beginning today and for the following 4 quarters, in a bank that pays a nominal interest rate of 6% with quarterly compounding. How large must each of the 5 payments be? D Question 5 Suppose you just won the state lottery, and you have a choice between receiving $2,000,000 today or a 30-year annuity of $150,000, with the first payment coming one year from today. What rate of return is built into the annuity? 3 pts You must make a payment of $1,000 in 10 years. To get the money for this payment, you will make 5 equal deposits, beginning today and for the following 4 quarters, in a bank that pays a nominal interest rate of 6% with quarterly compounding. How large must each of the 5 payments be? D Question 5 Suppose you just won the state lottery, and you have a choice between receiving $2,000,000 today or a 30-year annuity of $150,000, with the first payment coming one year from today. What rate of return is built into the annuity? 3 pts

Answer rating: 100% (QA)

To find the size of each payment in the scenario described we can use the formula for the present va... View the full answer