Assume that you have just won a lawsult and have been awarded a structured setti

Question

Assume that you have just won a lawsult and have been awarded a structured settiement by the court. The terms are that you will recelve 30 cash paymments of $6,900 each, with payments to be made every 9 months, with the first payment to be made today (Month O), and the last payment to be made at money now and have contacted a national firm (advertising on TV0 that is willing to purchase your structured settlement for cash today. The rate of return that they use to determine the cash amount of their offer is a nominal annual rate of 5.904 percent, with monthly compounding. Given this information, determine the cash amount that you can receive today if you accept their offer O $116,821 O $117,246 O $117,671 O $118,096 O $118,521 | Question 4 5 pts

Explanation / Answer

the 9 month rate = (1 + 5.904%/12)^9 = 4.5162%

FV = 0, N= 30, rate = 4.5162%, PMT = 6900

use PV function in Excel with type as 1

Amount = 117,246

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---