Posted by Anne on Thursday, September 29, 2011 at 6:17pm.
A state's lottery winner is promised $200,000 a year for 3 years(starting at the end of the first year). Interes rate is annually 7 percent on its fund.
How much is the present value of this lottery?

Finance  SraJMcGin, Thursday, September 29, 2011 at 6:38pm
Year 1 = 200,000 plus .07% = 14,000
Year 2 = 400,000 plus .07% = 28,000
Year 3 = 600,000 plus .07% = 42,000
When you say "the present value of this lottery" do you mean at the end of the 3rd year? If you mean NOW and he hasn't collected any money = 0!
Sra

Finance  Celia, Friday, September 30, 2011 at 2:08am
What is the expected return on a portfolio consisting of an equal amount invested in each stock?
Stock Expected return
A 15%
B 10
C 22
D 14
b. What is the expected return on the portfolio if 50 percent of the funds are invested in stock C, 30 percent in stock A, and 20 percent in stock D?
Answer This Question
Related Questions
 finance  You won a lottery which pays $10,000 per year for 10 years (at the end...
 Finance  You have just won the lottery and will receive $1,000,000 in one year...
 Statisics  The state lottery claims that its grand prize is $1 million. The ...
 Statisics  The state lottery claims that its grand prize is $1 million. The ...
 Statistics  The state lottery claims that its grand prize is $1 million. The ...
 accounting  You won a lottery which pays $10,000 per year for 10 years (at the ...
 math  Your invest $3,000 annually in a mutual fund that earns 10 percent ...
 Finance  Suppose the chances of winning the lottery are 1 in 14 million with ...
 finance  You wish to retire in 12 years and currently have $50,000 in a savings...
 Finance  You wish to retire in 12 years and currently have $50,000 in a savings...
More Related Questions