Example on lotteries in the united states, Microeconomics

Assignment Help:

Most lotteries in the United States pay their winnings over time. For illustration, a million-dollar winner will receive $100,000 initially and the rest in equal installments over the next 9 years. On the basis of this information, are the winners truly millionaires? Please, provide a calculation example.

ANSWER: Any million-dollar winner of a lottery who gets the winnings over time is not truly a millionaire if by that term we mean someone who has a total worth of one million dollars. With interest rates at 10% and the winnings to be paid over ten installments, the current value of a million-dollar lottery ticket is no more than $675,902.30. That is the most that any winner would expect to receive when selling the rights to his or her winnings to another investor.


Related Discussions:- Example on lotteries in the united states

Price elasticities of demand, how to compute the price of a laptop increase...

how to compute the price of a laptop increase of 20% and there is a 40% drop in the aquantity demanded

What is climate change, Q. What is Climate Change? Climate Change:As a ...

Q. What is Climate Change? Climate Change:As a consequence of cumulative emission of carbon dioxide (a by-product of fossil fuel use) and other chemicals over past two centurie

Game Theory, Three People choose whether to contribute a fixed amount towar...

Three People choose whether to contribute a fixed amount toward the provision of a public good. This good is provided if and only if at least two of them contribute. If it is not p

Statistics, please can you explainn what "down 0.1 percentage point on the ...

please can you explainn what "down 0.1 percentage point on the quarter means"?

Explain how normal profit and abnormal profit differ, Explain how normal pr...

Explain how normal profit and abnormal profit differ. Normal profit (breakeven) - which must contain commentary on the inclusion of opportunity costs. Abnormal profit should be

Production, What are the factors that determine the volume of production?

What are the factors that determine the volume of production?

Cobweb therom, explain convergent and divergent system

explain convergent and divergent system

Positive and normative statement, differentiate between normative and posit...

differentiate between normative and positive statements in economics with the help of a statement

Labour supply, Discuss how the opportunity cost principle influence a suppl...

Discuss how the opportunity cost principle influence a supplier''s decision to supply labour

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd