S.O.S. Mathematics CyberBoard

Please help me with the following questions step by step! I can't get to the right answers. I know it's a lot of questions... I hope you can help me by tonight! Thanks.

You just won the lottery. Receive $1 million today and another 10 annual payments that increase by $400k yearly. If the appropriate interest rate is 10%, find PV.

My work:

PV = 400 000 ((1 - (1/1.1^10))/.1) = 2 457 826.84

Text answer: 18 758 930.79

What is PV of $2k yearly at 12% discount rate if first payment is received 9 years from now and last payment is received 25 years from now.

My work:

PV = 2000 ((1 - 1/1.12^16)/.12) = 13 947.97

I also tried the following...

PV = 2000/1.12^9 + 2000/1.12^25 = 838.87

Text Answer: 5 751

A 15 year annuity pays $1.5k monthly and payments are made at end of each month. If interest rate is 15% compounded monthly for first 7 years and then 12% compounded monthly. Find PV of annuity.

My work:

k = .15/12 = 0.0125
k = .12/12 = .01

PV1 = 1500 ((1 - 1/1.0125^84)/.0125) = 77 733.28

PV2 = 1500 ((1 - 1/1.01^96)/.01 = 92 291.55

PV Total = PV1 + PV2 = 170 024.83

Text answer: 110 240.46

Given 6.5% interest yearly, what is the value of t = 7 of a perpetual stream of $3k payments that begin at t = 15.

My work:

I'm not sure if I understand the question, but I'm assuming that the value of the whole investment is $3k so...

3000 = CF/.065
195 = CF

Text answer: 29 700.29

A 5-year annuity of 10 $6k semiannual payments will begin 9 years from now (first payment 9.5 years from now). If discount rate is 12% compounded monthly, what is the value of this annuity in 5 and 3 years from now? Find also the current value.

My work:

k = .12/12 = .01

(1.01)^6 - 1 = .06152 = k

PV5 = 6000((1 - 1/1.06152^5.5)/0.6152) = 27 298.08
PV3 = 6000((1 - 1/1.06152^3.5)/0.6152) = 18 391.04
PV = 6000((1 - 1/1.06152^0.5)/0.6152) = 286.83

Text answer:
t = 5, 27 194.83
t = 3, 21 417.72
t = 0, 14 969.38

You're getting the effective rate ok...but nothing else!

I'll do the current value for you, but that's it...

Step 1: get PV of the 5 year flow:
6000[(1 - 1/1.06152^10) / .06152] = 43,844.21

Step 2: that's the PV as at 9 years from now; we need the PV now:
43844.21 / 1.06152^18 = 14,969.38

Good luck.

_________________
I'm not prejudiced...I hate everybody equally!

@Macleef that was really informative cos i was having similar question but with this thread am good now Thanks Denis for the info.

Well then buddy, why don't you post yours: may help someone else...
or are you not interested in helping?

_________________
I'm not prejudiced...I hate everybody equally!