(Present value of annuity payments) The state lottery's million-dollar payout provides for $1.5 million to be paid in 20 installments of $75000 per payment. The first $75000 payment is made immediately, and the 19 remaining $75000 payments occur at the end of each of the next 19 years. If 8 percent is the discount rate, what is the present value of this stream of cash flows? If 16 percent is the discount rate, what is the present value of the cash flows?
Present value of annuity due=(1+rate)*Annuity[1-(1+interest rate)^-time period]/rate
At 8%:
Present value=1.08*75000[1-(1.08)^-20]/0.08
=$75000*10.6035992
=$795,269.94
At 16%:
Present value=1.16*75000[1-(1.16)^-20]/0.16
=$75000*6.877455443
=$515,809.16(Approx).
(Present value of annuity payments) The state lottery's million-dollar payout provides for $1.5 million to be pa...
(Present value of annuity payments) The state lottery's million-dollar payout provides for $1.5 million to be paid in 20 installments of $75000 per payment. The first $75000 payment is made immediately, and the 19 remaining $75000 payments occur at the end of each of the next 19 years. If 8 percent is the discount rate, what is the present value of this stream of cash flows? If 16 percent is the discount rate, what is the present value of the...
Present value of annuity payments) The state lottery's million-dollar payout provides for $1.1 million to be paid in 20 installments of $55000 per payment. The first $55000 payment is made immediately, and the 19 remaining $55000 payments occur at the end of each of the next 19 years. If 12 percent is the discount rate, what is the present value of this stream of cash flows? If 24 percent is the discount rate, what is the present value of the...
(Present value of annuity payments) The state lottery's million-dollar payout provides for $1 million to be paid in 20 installments of $50,000 per payment. The first $50,000 payment is made immediately, and the 19 remaining $50,000 payments occur at the end of each of the next 19 years. If 6 percent is the discount rate, what is the present value of this stream of cash flows? If 12 percent is the discount rate, what is the present value of the...
(Present value of annuity payments) The state lottery's million-dollar payout provides for $1 million to be paid in 25 installments of $40000 per payment. The first $40000 payment is made immediately, and the 24 remaining $40000 payments occur at the end of each of the next 24 years. If 6 percent is the discount rate, what is the present value of this stream of cash flows? If 12 percent is the discount rate, what is the present value of the...
(Present value of annuity payments) The state lottery's million-dollar payout provides for $1.4 million to be paid in 20 installments of $70 comma 000 per payment. The first $70 comma 000 payment is made immediately, and the 19 remaining $70 comma 000 payments occur at the end of each of the next 19 years. If 11percent is the discount rate, what is the present value of this stream of cash flows? If 22 percent is the discount rate, what is...
(Present value of annuity payments) The state lottery's million-dollar payout provides for $1.4 million to be paid in 25 installments of $56 comma 000 per payment. The first $56 comma 000 payment is made immediately, and the 24 remaining $56 comma 000 payments occur at the end of each of the next 24 years. If 11 percent is the discount rate, what is the present value of this stream of cash flows? If 22 percent is the discount rate, what...
(Related to Checkpoint 6.2) (Present value of annuity payments) The state lottery's million-dollar payout provides for $1.11.1 million to be paid in 2525 installments of $44 comma 00044,000 per payment. The first $44 comma 00044,000 payment is made immediately, and the 2424 remaining $44 comma 00044,000 payments occur at the end of each of the next 2424 years. If 77 percent is the discount rate, what is the present value of this stream of cash flows? If 1414 percent is...
(Related to Checkpoint 6.2) (Present value of annuity payments) The state lottery's million-dollar payout provides for $1.21.2 million to be paid in 2020 installments of $60 comma 00060,000 per payment. The first $60 comma 00060,000 payment is made immediately, and the 1919 remaining $60 comma 00060,000 payments occur at the end of each of the next 1919 years. If 77 percent is the discount rate, what is the present value of this stream of cash flows? If 1414 percent is...
The state lottery's million-dollar payout provides for $1.4 million to be paid in 20 installments of $70 comma 000 per payment. The first $70, 000 payment is made immediately, and the 19 remaining $70,000 payments occur at the end of each of the next 19 years. If 9 percent is the discount rate, what is the present value of this stream of cash flows? If 18 percent is the discount rate, what is the present value of the cash flows?...
The state lottery's million-dollar payout provides for $1.21 million to be paid in 20 installments of $60,000 per payment. The first $60,000 payment is made immediately, and the 19 remaining $60,000 payments occur at the end of each of the next 19 years. If 8 percent is the discount rate, what is the present value of this stream of cash flows? If 16 percent is the discount rate, what is the present value of the cash flows?