How much would the annual payments be

Assignment Help Financial Management

Reference no: EM13870583

Darshak won a $1,000,000 lottery which will pay $5,000 at the beginning of each month for the next 30 years.

(a) If the payments were made at the beginning of each year for the next 30 years rather than at the beginning of each month, how much would the annual payments be?

(b) If the payments were made continuously, how much would be paid each month?

Reference no: EM13870583

Questions Cloud

Maintain without resorting to additional equity issues : An all-equity-financed firm plans to grow at an annual rate of at least 27%. Its return on equity is 42%. What is the maximum possible dividend payout rate the firm can maintain without resorting to additional equity issues?

Find the sustainable and internal growth rates for a firm : Find the sustainable and internal growth rates for a firm with the following ratios: asset turnover = 1.40; profit margin = 8%; payout ratio = 25%; equity/assets = .70.

What will be the number of shares : Suppose that you own 3,400 shares of Nocash Corp. and the company is about to pay a 25% stock dividend. The stock currently sells at $125 per share. What will be the number of shares that you hold after the stock dividend is paid?

Assuming annual payments-what is the value of the bond : Jane issued five-year bonds that pay a coupon of 6.5 percent semi annually. The current market rate for similar bonds is 5.5 percent. How much will you be willing to pay for Jane's bond today? Jane is issuing a 10-year bond with a coupon rate of 6.76..

How much would the annual payments be : Darshak won a $1,000,000 lottery which will pay $5,000 at the beginning of each month for the next 30 years. If the payments were made at the beginning of each year for the next 30 years rather than at the beginning of each month, how much would the ..

Use the present worth analysis method to determine : Use the present worth analysis method to determine which alternative (A or B) one should choose. Compute the net present worth of alternative A. Compute the net present worth of alternative B.

Find the accumulated value of this annuity one quarter : Payments are made at the beginning of each quarter for 50 quarters. The first payment is $100, the second payment is $102, the third payment is $104, and so on, with each subsequent payment increasing by $2. If the effective interest rate is 2.5% per..

Calculate the accumulated value of this annuity : The annual effective interest rate is 12%. A ten-year continuous annuity makes payments totalling $30 during the first year, $40 during the second year, $50 during the third year, and so on. Within each year the payments are level. Calculate the accu..

Marketing demonstrate the likelihood of a risk event : Can the impact of one specific risk event, such as a technical risk event, create additional risks (which may or may not be technical risks)? Can risk events be interrelated? Does the list provided by marketing demonstrate the likelihood of a risk ev..

User Account

All Pages