Assume that you just won the state lottery. Your prize can be taken in the form of $40,000 at the end of each of the next 25 years or as a single amount of $500,000 paid immediately. If you expect to earn 7% annually on your investments over the next 25 years, which alternative should you take and why?
How much would you pay today to receive $300 each year for the next 11 years, if the first payment is made today? Assume that you can earn 2.5% per year. Round your answer to two decimal places.
If you deposit $3,000 end of each year for 10 years, how much will you have in 10 years? Assume the interest rate is 5% per year. Round your answer to the nearest dollar.