Several personal financial problems

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List several personal financial problems for which you or other individuals might use the concepts from the Lectures to help you make this decision. Calculate the value in 5 years of $1,000 deposited in a savings account today if the account pays interest at a rate of 8% per year, compounded annually. Congratulations, you have just won the Publishers Corporation Sweepstake’s! Your winnings are $1,000,000 paid over ten years (end of year) annuity of $100,000 per year for ten years; your opportunity cost is 6%. Would you accept $600,000 in cash now or take the 10 year annuity, show your work. Suppose you wish to purchase a house 5 years from now and estimate that an initial down payment of $25,000 will be required at that time. What size annuity payment will result in a lump sum equal to $25,000 assuming you made equal annual end-of-year deposits in an account paying annual interest of 8% for 5 years, show your work.

Reference no: EM131178704

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