How much do you get paid each year before taxes

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Reference no: EM131970344

1. Lets say you bought a winning ticket to Wednesday's Powerball lottery. The estimated jackpot is $53 million dollars. You decide to take a lump sum of 54% of the total jackpot. (You do have to pay taxes you know.) How much is your lump sum payment?

2. Since you are not to good at keeping your money because of friends, family, and other outside influences, you decide to receive the $53 million as an annuity in 25 equal installments? The insurance company that offers the annuity regards the present value the same as your lump sum in problem 10 minus the first payment.

a. How much do you get paid each year before taxes?

b. Use the rate formula in excel or in your calculator to find the interest rate of the annuity?

Rate(n, d, -PV) Present value (P) = _____

Annual payment (d) = _____

Number of payments (n) = _____

Annual interest rate = _____ (use formula above)

3. When I retire in May at the age of 69 years and 4 months. I want to have $4020 in income per month in addition to my Social Security. Based on my average expected lifetime of 89.5 years, how much would have to be invested in a life income annuity earning 4.15% APR to pay that much per year?

Reference no: EM131970344

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