Calculating present values

Assignment Help Financial Management

Reference no: EM13848264

Calculating Present Values

You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $510,000 per year. Thus, in one year, you receive $1.51 million. In two years you get $2.02 million, and so on.

If the appropriate interest rate is 6.1 percent, what is the present value of your winnings? (Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Reference no: EM13848264

Questions Cloud

Calculating perpetuity values : The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $20,000 per year forever. Suppose a sales associate told you the policy costs $465,000. At what interest rate would this be a fair deal?

What are the possible ramifications for patients : This case presents a very negative mindset harbored by at least some employees at Oakridge University Hospital. What are the possible ramifications for patients at Oakridge University Hospital or any other facility who encounter employees possessi..

Calculating rates of return : Suppose an investment offers to quadruple your money in 18 months (don’t believe it). What rate of return per quarter are you being offered?

Calculating the number of payments : You’re prepared to make monthly payments of $200, beginning at the end of this month, into an account that pays 6.1 percent interest compounded monthly. How many payments will you have made when your account balance reaches $11,000?

Calculating present values : You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $510,000 per year. Thus, in one year, you receive $1.51 million. In two years you get $2.02 million, and so on. If the appropriate intere..

Calculating loan payments : You want to buy a new sports coupe for $74,500, and the finance office at the dealership has quoted you an APR of 5.6 percent for a 48 month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan?

Calculating annuity future values : You are planning to make annual deposits of $6,330 into a retirement account that pays 10 percent interest compounded monthly. How large will your account balance be in 28 years?

How do price-earnings ratio and the market-book ratio : How do price/earnings ratio and the market/book ratio provide a feel for the firms riskiness as perceived by the investors who trade the firm’s stock?

About the adequacy of their debt coverage ratios : Explain why the volatile (i.e. instability) of a firms input and operating costs over time might be a critical factor in drawing conclusions about the adequacy of their debt coverage ratios

User Account

All Pages