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Team Assignment – 1 ( due: Tuesday, February 8 )
1.
You have just won the lottery
.
You will receive $ 3
,
500
,
000 today
,
and then receive 36 payments
of
$ 800
,
000
.
These payments will start one year from now and will be paid every four months
.
A representative from Greenleaf Investments has offered to purchase all the payments from you
for $ 22 million
.
If the appropriate interest rate is a 8 percent APR compounded daily
,
should
you take the offer
?
Assume there are 12 months in a year
,
each with 30 days
.
2.
A 7year annuity of fourteen $ 8
,
000 semiannual payments will begin 4 years from now
,
with the
first payment coming 4 years from now
.
If the discount rate is 12 percent compounded
continuously
,
what is the value of this annuity two years from now
?
What is the value ten years
from now
?
What is the current value of the annuity
?
( round to two decimals )
3.
An AllPro defensive lineman is in contract negotiations
.
The team has offered the following
salary structure
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