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Present and future value tables of $1 at 3% are presented below: NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111
Present and future value tables of $1 at 3% are presented below:
NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111.030000.970871.00000.970871.03001.0000021.060900.942602.03001.913472.09091.9708731.092730.915143.09092.828613.18362.9134741.125510.888494.18363.717104.30913.8286151.159270.862615.30914.579715.46844.7171061.194050.837486.46845.417196.66255.5797171.229870.813097.66256.230287.89236.4171981.266770.789418.89237.019699.15917.2302891.304770.7664210.15917.7861110.46398.01969101.343920.7440911.46398.5302011.80788.78611111.384230.7224212.80789.2526213.19209.53020121.425760.7013814.19209.9540014.617810.25262131.468530.6809515.617810.6349616.086310.95400141.512590.6611217.086311.2960717.598911.63496151.557970.6418618.598911.9379419.156912.29607161.604710.6231720.156912.5611020.761612.93794
Shelley wants to cash in her winning lottery ticket. She can either receive seven, $188,000 semiannual payments starting today, or she can receive a single-amount payment today based on a 6% annual interest rate. What is the single-amount payment she can receive today?
Multiple Choice
- $1,359,293.
- $1,048,985.
- $1,206,432.
- $886,815.
Expert Solution
Amount of single payment that Shelley can receive today is as follows;
Present value of semi annual Cash inflow = 188000*6.41719
= 1,206,431.72 or $1,206,432
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