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Find the following values for a lump sum assuming annual compounding:

a) The future value of 500.00 invested at 8% percent for one year

b) The future value of 500.00 invested at 8% percent for five years

c) The present value of 500.00 to be received in one year when the opportunity cost rate is 8%

d) The present value of 500 to be received in five years when the opportunity cost rate is 8%

Part 2

Assume that you won 35 million and the state will pay you 20 annual payments of 1.7 million each begining immediately. Rate of return on securities of similar risk to the lottery earning(the rate on 20 year us treasury bond) is 6% what is the present value of my winning?

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91527744

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