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Vlad [161]
3 years ago
7

You just won the grand prize in a national writing contest! As your prize, you will receive $500 a month for 50 months. If you c

an earn 7 percent on your money, what is this prize worth to you today
Business
1 answer:
max2010maxim [7]3 years ago
3 0

Answer:

<u>Prize is $22,071.39 worth today</u>

Explanation:

Present value of Annuity = A*[(1-(1+r)^-n)/r]

A - Annuity payment = 500

r - rate per period = 6/12 = .5%

n - no. of periods = 50

Present value of Annuity = 500*[(1-(1.005)^-50)/.005]

= 500*[(1-0.77928606825)/.005]

= 500*44.14278635

= $22,071.39

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The present value of the offer is $145,466.83

<h3>What is the present value?</h3>

The first step is to determine the present value of the growing annuity. The formula that would be used is:

\frac{P}{r - g} x [1 - \frac{1 + g}{1 + r} ^{n} ]

Where:

  • p = base salary
  • r = discount rate
  • g = growth rate
  • n = number of years

$35,000 / (0.12 - 0.04) = 437,500

1 - (1.04/0.12)^5 = 0.31

0.31 x 437,500 = $135,466.83

Present value =  $135,466.83 + $10,000 =  $145,466.83

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2 years ago
All of the following are fees typically charged by credit card companies EXCEPT:
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3 years ago
Why might a marketer choose Internet advertising over television advertising?
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Answer:

D. Because television advertising is more expensive

Explanation:

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3 years ago
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Nessus, nessus. why do you need to run both tools like zenmap and nessus to complete the reconnaissance phase of the ethical hac
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4 years ago
Sue purchased a stock for $25 a share, held it for one year, received a $1.34 dividend, and sold the stock for $26.45. What nomi
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Answer:

11.16%

Explanation:

Calculation for What nominal rate of return did she earn

Nominal rate of return= ($26.45 + 1.34 − 25) / $25

Nominal rate of return= 0.1116*100

Nominal rate of return=11.16%

Therefore the nominal rate of return that she earn is 11.16%

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