Present and future value tables of $1 at 3% are presented below: FVA 1.0000 FVAD

Question

Present and future value tables of $1 at 3% are presented below: FVA 1.0000 FVAD $1 1.0300 2.0909 3.1836 4.3091 5.4684 6.6625 7.8923 9.1591 10.4639 11.8078 PVA $1 PVAD $1 1.03000 1.06090 0.97087 0.94260 0.91514 0.88849 0.86261 0.83748 1.97087 2.91347 .82861 4.71710 5.57971 3 4 1.12551 115927 1.19405 1.22987 1.26677 1.30477 1.34392 2.82861 3.71710 4.57971 5.41719 6.23028 4.1836 6 6.4684 76625 8.8923 0.78941 0.76642 7.23028 9 7.78611 8.53020 8.78611 0.72242 12.8078 14.1920 12 13 1.46853 1.51259 1.55797 .6047 0.68095 0.66112 0.64186 9.95400 10.63496 11.29607 11.93794 12.56110 6.0863 17.5989 19.1569 0.25262 10.95400 11.63496 12.29607 2.93794 17.0863 18.5989 16 Shelley wants to cash in her winning lottery ticket. She can either receive eight, $191,000 semiannual payments starting today, or she can receive a lump-sum payment now based on a 6% annual interest rate. What is the equivalent lump-sum payment? O $900,966 $1,380,983 O $1,225,683 $1,065,725

Explanation / Answer

$1,380,983 Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Semi Annual Payment               191,000.00 Interest rate = 6%/2 3% Time period = 4*2                            8.00 PVAD $1 for 8 years at 3%                     7.23028 Equivalent Lumpsum Payment           1,380,983.48

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