Instructions
Answer the following questions in a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
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Please respond to the following:
You have just won the Strayer Lottery jackpot of $11,000,000. You will be paid in 26 equal annual installments beginning immediately. If you had the money now, you could invest it in an account with a quoted annual interest rate of 9% with monthly compounding of interest. What is the present value of the payments you will receive?
In your own words and using various bond websites, locate one of each of the following bond ratings: AAA, BBB, CCC, and D. Describe the differences between the bond ratings. Identify the strengths and weaknesses of each rating.
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Present Value Calculation
The Present Value of the Payments to be Received
The jackpot amount is $ 11,000,000
Annual instalments =ORDER YOUR PAPER AT WRITTASK.COM
The interest rate = 9%
Present value =?
The period of installments = 26 months
The interest rate = 9/ORDER YOUR PAPER AT WRITTASK.COM = 0.75ORDER YOUR PAPER AT WRITTASK.COM
Present value is given as: PV = F/ [(1+r)^n] where F is given as the future payment, r is the interest rate and n is the duration
= 11,000,000/ [(1+0.75) ^26) = $ 1,068,896…
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