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Jack and Diane are lottery winners. They hold the ticket to the Grand Prize in the Set for

Jack and Diane are lottery winners. They hold the ticket to the Grand Prize in the Set for

Jack and Diane are lottery winners. They hold the ticket to the Grand Prize in the Set for Life Prize that makes 20 consecutive annual hitch: the eleventh payment (to be received at the end of year 10) is not $50,000 but only $20,000 closest to the present value of the prize if interest rates are 4%? of $50,000 starting immediately. There is one (that is, this payment is $30,000 LESS than te other 20. Which of the following comes a $ 551,829 b. $ 686,430 c. S 743,867 , d. $ 635,849 e$ 591,154 QUESTION 6 5 points Save Answer As an employee in the Lotery Commission, your job is to design a new prize. Your idea is to create two grand prie choices:(1) rocelving $50,000 at the end of each year beginning in one yar for 20 consecutive years or(2 receiv ng $600,000 today folowed by a one-time payment at the end of 20 years. Using an ime ost ate of 4%, which of the following comes closest to the amount prize (2) needs to pay at the end of year 20 in order that botth prizes to have the same present value? a.$ 393,342 b.$ 440,463 c.$114,932 d.$ 326,649 e.$ 235,712 QUESTION 7 3 points Save Answe A couple bormows $200,000 for a mortgage that requires fixed monthly payments over 30 consecutive years 84%, which of the following comes closest to the monthly payment? The first monthly payment is due in one month If the insenest rate on the mortgage a $ 1.199 b.$ 1,074 a. $ 843 d.$1,331 5 points Save Answer QUESTION 8 You are trying to price two bonds that have the same maturity and par value but different coupon rates. Both bonds mature in 8 years and at $1,000. e bond has a coupon rate o 4% and a yield to matu y of4%, Theot r bond has a copo e of 5% and a ye at yof 4% what between the pri Of these two bonds? maturity both bonds rehurn the par value of the a val a$ 140.39 b.$ 62.10 a.$ 119.43 e. $ 67.33 QUESTION 9 3 points Save Answer

Abhinav 04-Dec-2019

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