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IrinaVladis [17]
3 years ago
12

Suppose you have a winning lottery ticket and you are given the option of accepting $3,000,000 three years from now or taking th

e present value of the $3,000,000 now. The sponsor of the prize uses a 6% discount rate. If you elect to receive the present value of the prize now, the amount you will receive is:
Business
1 answer:
Minchanka [31]3 years ago
7 0

Answer:

The amount that will be received today is $2518857.85

Explanation:

To calculate the amount that will be received today, we need to discount the amount that will be received three years from now for a period of 3 years using the given discount rate. As there is only a single cash flow, we will use the formula for present value of principal.

The present value of principal is,

Present value = Cash flow / (1+d)^t

Where,

  • Cash flow is the amount for which we have to found the present value
  • d is the discount rate
  • t is the time in terms of number of periods
  • Here the t is in years and the number of periods is 3 years

Present value = 3000000 / (1+0.06)^3

Present value = 2518857.849 rounded off to $2518857.85

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Dmitriy789 [7]

Answer:

Barbara will have $210,349

Mary will have $188,922

Explanation:

Total time of investment is 40 years = age 67 - age 27

After 10 years, Barbara will have  $27,633 (this figure used "FV" calculation in excel = FV(7%,10,2000)

Then Barbara put all $27,633 in next 30 years then she will have $210,349 = 27,633 x (1+7%)^30

Mary didn't now invest in first 10 years, but then  invests $2,000 per year for the next 30 years, so she will have $188,922 = FV(7%,30,2000)

4 0
3 years ago
Immediately after a hurricane, it is likely that the quantity demanded for tree cutting/removal services will ______ the quantit
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Answer:

Immediately after a hurricane, it is likely that the quantity demanded for tree cutting/removal services will "Remain" the quantity supplied, causing the price of tree cutting/removal services to ''Rise''

Explanation:

3 0
3 years ago
Each firm can produce at most one car. Suppose the market for electric cars is competitive. Why is the equilibrium price in this
lisabon 2012 [21]

Answer:

Consumer surplus = (60000 - 40000)+ (90000 - 40000)+(40000 - 40000) = $70000

Producer surplus = (40000 - 20000)+(40000 - 30000)+ (40000 - 40000) = $30000

Social surplus = Consumer surplus +Producer Surplus= 70000 + 30000 = $100000

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7 0
3 years ago
(a) which are higher, federal income taxes or state and local income taxes? (b) how much are total income taxes per capita?
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What.......................
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Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest. If the inflat
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Answer:

3%

Explanation:

Data provided as per the question

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Real interest rate = Nominal interest rate - Inflation rate

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