Calculating future and present value
Not what you're looking for?
The price in last week's National Lottery was estimated to be worth £35 million. In the lottery, if you were lucky enough to win, the National Lottery will pay you £1.75 million per year over the next 20 years. Assume that the first instalment is received immediately.
a) If interest rates are 8%, what is the present value of the prize?
b) If interest rates are 8%, what is the future value after 20 years?
c) How would your answers change if the payments were received at the end of each year?
d) Briefly explain any two of the following:
i) Forward Contracts
ii) Swaps
iii) Assets Beta and Equity Beta
Purchase this Solution
Solution Summary
This solution provides steps to calculate the future value and present value.
Purchase this Solution
Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations