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Korolek [52]
3 years ago
15

Michael won the Powerball jackpot of 57 million dollars. He has two options to collect the cash: (a) 30-year annuities (first pa

yment one year from today) which future value equates the jackpot amount given that the prevailing interest rate is 8% per year; (b) a single payment now, corresponding to the present value of those 30-year annuities. Michael has big plans, hence he prefers option (b). Assuming that there are no taxes, how much money will he be able to collect now
Business
1 answer:
erma4kov [3.2K]3 years ago
3 0

Answer:

$5,664,627.53

Explanation:

future value of the annuity = $57 million

interest rate = 8%

number of periods = 30

FV annuity factor, 8%, 30 periods = 113.283

annual payment = future value / FV annuity factor= $57,000,000 / 113.283 = $503,164.64

the present value of an annuity = annual payments x PV annuity factor

PV annuity factor, 30 periods, 8% = 11.258

present value of the annuity = $503,164.64 x 11.258 = $5,664,627.53

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One of the questions in the Pew Internet & American Life Project asked adults if they used the Internet at least occasionall
g100num [7]

Answer:

Explanation:

S/N   Age range       Adult Population       Population Internet Users

A       18   -    29                 478                                 454

B       30   -    49                833                                 741

C       50 and above         1644                                1058

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Hence, n(E) = 478 and n(A) = 454

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b) n(E) = 833 and n(B) = 741

∴ Probability of Internet users (30 - 49), P(B) = n(A)/n(E) = 741/833 = 0.8896 (88.96%)

c) n(E) = 1644 and n(C) = 1058

∴ Probability of Internet users (50 and above), P(C) = n(C)/n(E) = 1058/1644 = 0.6436 (64.36%)

d) Let Et = Total estimate proportion

Hence, n(Et) = 2955 and n(A) = 454

∴ Probability of 18 - 29 age range using Internet overall Pt(A) = n(A)/n(Et) = 454/2955 = 0.1536 (15.36%)

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