If the market interest rates are currently 12%, how much does the lottery have to invest today?

today interest rates

Today Interest Rates
Joe won a lottery jackpot that will pay him $ 12,000 each year for the next ten years. If the market interest rates are currently 12%, how much does the lottery have to invest today to pay out this prize to Joe over the next ten years?

Dave W
If the payments are made at the end of each year, then that’s a basic net present value of an annuity estimate:

PVoa = PMT [(1 - (1 / (1 + i)^n)) / i]

= 12000 * [(1 - (1 / (1 + .12)^10)) / .12]
= 12000 * [(1 - (1 / 3.10584820834421)) / .12]
= 12000 * [(1 - 0.321973236590696) / .12)]
= 12000 * 5.65022302841087
= 67802.68

or the simpler way is to use the new present value of an annuity function in a spreadsheet with 12000 as the payment, .12 as the interest rate, and 10 as the term.

If they’re paying the first $ 12000 up front, then 9 more payments over the next 9 years, do the same estimate as above using 9 as the “n”, which gives $ 63939.00, plus the initial $ 12,000 for a total of $ 75939.00

BigBen
You just have to discount future value to net present value (NPV) using that interest rate. Assuming Joe already get paid today, the lottery have to invest another $ 63939 now to ensure Joe get paid $ 12000 every year (12% interest) for another nine years.

NPV=P/(1+i)^n

e.g.
- Yr 0 $ 12000 = $ 12000 NPV @ 12% interest
- Yr 1 $ 12000 = $ 10714 NPV @ 12% interest
- Yr 2 $ 12000 = $ 9566 NPV @ 12% interest
.
- Yr 9 $ 12000 = $ 4327 NPV @ 12% interest

so, the lottery need a total of $ 63939 investment to match $ 12000 yearly payment. I used this to calculate my stock intrinsic value anyway.

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Wells Fargo Prime Rate> Mortgage modification please advise.?

wells fargo prime rate

Wells Fargo Prime Rate
I am going on over a year to get a loan modification. here is the facts
-combined income in 05-08 was 130k
-both of lost lost jobs in mid 09, wife works for 50% less I draw unemployment now over the last year making 50k
-home value 170k owe around 300k bought in 06, because of 1 late on each of our credit at the time we where place in a sub prime loan with wells fargo acceptance- our rate is 8.99%
-We have no savings and now 30k in cc debt!

At first I went thought this service that questioned for 3k but I was scammed. Sept I then contacted Wells Fargo at that time they sorry we are not qualified blah blah blah.. They did tell us to borrow money from parents or relatives, take cash advances from cc, sell cars, rent a room, garage sale ect. Well then we stopped paying then in Dec them sent us a government plot with a 3mth probation period. this is 1k less then our payment what a huge relief. The noticed said if make 3 payment Dec-Feb we get a permanent modification. Well in Feb I called these clowns they said just keep sending in the trial amount until I got a letter last week that said I have been denied due to not cooperating with my paperwork WTH I send these idiots over and over my documents. I called them today and the women said the board of directors needs to review my case this will take 30-45 days keep making your payments, She was baffled by this notice. In the mean time we get collection calls from india this has been going on for 6 months.

This is completely disgusting my parents opened the thought for us to go back to Omaha as my home is underwater-I reckon this probation period payments are a way for them to get more $ $ out of it.

Anyone going through this.
thanks.

RetiredDebtFree
Of course you know now that buying a $ 300K house when you only make $ 130K a year was terrible judgment. So, now you do a small sale or foreclosure. You are in no financial shape to keep that house. Go with the parent-plot and start working, saving, and spending dutifully. Never again buy a house that is worth over double your take-home pay, and after you have six months basic expenses in an emergency fund.

Omaha isn’t terrible this time of year.

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Why does an interest in buying bonds cause interest rates to fall?

bond interest rates today

Bond Interest Rates Today
I read in the New York Times today that more people are buying bonds than before, and this is causing interest rates to fall. Why does an interest in buying bonds drive down interest rates?

Judy
Because people are willing to pay less for bonds.

Things are so crazy – that if the government were to offer 1% 30 year bonds, people would probably buy them STILL.

Supply and demand.
The goverment can sell these bonds for nothing due to the high demand.
People will still buy them.
/

falsi fiable
Bond prices go in the opposite direction of interest rates.
IndianOptimist
Bond prices go inversely to interest rates. When interest rates go up, bond prices go down and when interest rates go down, bond prices go up. Remember, we’re talking about previously issued bonds trading on the open market. You can more easily know this by looking at the following example.

A bond is issued for $ 10,000 for five years with a 5% coupon or interest rate, paid every six months. Then interest rates rise to 6%.

If you want to sell this bond, who would buy it when it is paying 1% below market rates (5% vs. 6%)? You have to sweeten the deal so the buyer gets a market rate for the bond.

You can’t change the interest rate on the bond. That’s fixed at 5%. You can, but change the price you will take for the bond.

The annual payment of $ 500 ($ 10,000 x 5%) must equal a 6% payment. Doing the math, you learn that the face value of the bond must be discounted to $ 8,333 so that the $ 500 fixed payment equals a 6% yield on the buyer’s investment ($ 8,333 x 6% = $ 500).

If interest rates went down instead of up, you could then sell your bond at a premium over face value because the fixed interest rate would be higher than the market rate.

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2012 bond interest rates today

Bond Interest Rates Today
here is a practice example:

Company X issued a $ 1,000 bond 5 years ago with an initial term of 25 years and a coupon rate of 8%. Today’s interest rate is 9%. Bonds interest are paid semiannually.

Thanks for the help.

Paul
1000/1.045^5=672.9

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Prime Rate Average- What was the lowest prime rate in the U.S.for last 10 years…???????

prime rate average

Prime Rate Average
Normally, how much minimum rate apply for mortgage ……… Prime plus……….if you have average score…

RONALD E B
The lowest prime rate since 1997 was 4.00% in June 2003.
winters in buffalo
The above info is right about the lowest Prime.

As for the mortgage part of the question… mortgages aren’t automatically tied to Prime. My lender uses 10-year treasury bills.

Also, the rate will vary depending on the type of loan.

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Hotel Discount Rates> Do hookers have good discount hotel rates?

hotel discount rates

Hotel Discount Rates

One More Angel To Add To The Sky
lmao…

question ♣Caydens…. II♣ she might know…

her pimp just stole some money from her..

Lauran B.
at Los Vegas they do
wwefanatic
i doubt it. excellent luck.
psst.... its me
i dont know. but if i see a hooker ill question her
Joycee
they probably all just carry AAA cards on them for discounts

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Fed Prime Rate History- HELP WITH HISTORY QUESTIONS?

fed prime rate history

Fed Prime Rate History
1.) America’s return to a peacetime economy in 1920 and 1921 was marked by

1. a narrowing of the gap between rich and poor.
2. a 3.5 percent national unemployment rate, the lowest to date.
3. steady prices and economic well-being for the majority of the U.S. population.
4. a 20 percent unemployment rate, the highest to date.

2.) President Harding’s stance on proscription was exemplified by the fact that

1. he was a frequent speaker at temperance gatherings.
2. all visitors to the White House were searched to make sure they were not carrying alcoholic beverages.
3. liquor flowed freely in the White House during his handing out.
4. he spoke often about the necessity of upholding the law.

3.) Underlying the New Deal was the belief that

1. capitalism held the solution to the nation’s economic crisis.
2. the greatest flaw in America’s capitalist economy was over utilization.
3. government intervention in huge business was terrible business.
4. socialism held the solution to the nation’s economic crisis.

4.) Opponents of the New Deal included business leaders and

1. workers in the Civilian Conservation Corps.
2. western farmers.
3. the League of Women Voters.
4. some labor leaders.

5.) During the Fantastic Depression, Native Americans

1. saw the federal government’s policy of assimilation strengthened.
2. were forced onto reservations by the Indian Sort-out Act of 1934.
3. saw even fewer gains than did members of other minority groups.
4. were once again able to own land communally.

6.) In his iron curtain speech, British prime minister Winston Churchill suggested that

1. the United States and its European allies had contained the Soviet Union.
2. the Soviets; military power was as strong as iron.
3. the Soviet Union was becoming an industrial nation.
4. Soviet suppression of the well loved will in eastern and central Europe had isolated those regions from the free world.

7.) Anti-Communist zealot Senator Joseph McCarthy was finally discredited when he

1. charged that there were Communists in the U.S. army.
2. announced that Communists in the Republican Party outnumbered those in the Democratic Party.
3. insisted that thousands of federal employees were disloyal to the United States.
4. charged that President Eisenhower was a Communist.

8.) In the Vietnam War, military officials started calculating their progress in body counts and kill ratios because

1. it was the only way to characterize between military and civilian deaths.
2. it was impossible to measure military success based on territory seized.
3. they realized they were losing an unique number of soldiers and that the people in the United States would want to know why.
4. a delegation of American soldiers had questioned for measures they could readily know.

9.) In the end, the Vietnam War

1. was lost because the people of South Vietnam strongly supported their government.
2. established a democratic government in Saigon.
3. garnered more support from the American public than World War II did.
4. contributed to internal disorder in the United States and the downfall of two presidents.

10.) By the time Ronald Reagan left office in 1989, the United States and the Soviet Union

1. had resolved all of their disputes and had agreed to ruin their nuclear arsenals.
2. were on the brink of nuclear war.
3. had agreed that communism and capitalism could coexist peacefully.
4. had reached their highest level of cooperation since World War II.

11.) During the Carter handing out,

1. the president was compelled to cut federal spending due to rising inflation.
2. the nation’s economic fortunes improved.
3. the president turned to upper-income Americans to ensure the solvency of Social Security.
4. U.S. corporations and wealthy those gained small from new legislation.

12.) The USA Patriot Act of 2001

1. suspended certain civil liberties protections.
2. established new civil liberties protections for American citizens.
3. increased taxes to help pay for the war on terrorism.
4. made new civil liberties protections only for American-born Muslims.

THANK YOU SO MUCH!!! :)

Will
No doubt some fool will do your homework for you, but it won’t be me.
Molly Middle
I’m sure you can find most of your answers in whatever sources or textbook you were supposed to study, and the rest at Wikipedia.

It shouldn’t take you more than an hour for all of those questions.

Excellent luck!

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How do non-US citizens outside the US buy US stocks at discount brokerage rates?

rate discount brokers

Rate Discount Brokers
My broker charges about US$ 27 a trade, while people in the US pay less than $ 10 with discount brokers. I don’t have a US bank account or have anything to do with the US; I just want to buy and sell US shares at <$ 10 a trade. How do I go about it?

cme
tdameritrade charge Just $ 9.99 for non-us citizens

http://www.tdameritrade.com/welcome1.html

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Federal Funds Open Rate- What will the Federal Reserve Open Market Committee will do with the Federal Funds rate on Nov. 3-4th?

federal funds open rate

Federal Funds Open Rate
What are your thoughts?

bap32211
The Federal Reserve is intended to place everyone in the world in debt by making money that doesn’t exist. In the end, everyone in the world will be in debt and be forced to depend on the huge greedy corporations that have bought out the majority of company’s below them.

be prepared and don’t help the corporations. Sorry to say it is too late to do anything because everyone will just be ignorant about what the U.S. government and corporations have been plotting for over 60 years….

Lawrence E
They will not change the rate but will make statements as to when perhaps they might start to consider raising them.
niceguy185
I reckon they may raise it just to stop hyperflation from happening. But I don’t reckon they would do raise it too much because it might make a negative shock to the recovering economy.
sbledsoe37
The economy is too much in doubt right now to raise rates, if nothing more than it will have a negative impact on consumers. The consumer must come around as the increase in GDP was a result of massive government expenditures. If the consumer sits on their hands, this economy will sink into recession again. But, they will use some economic rhetoric to hedge all their bets by saying that they are committed to the growth of the overall economy while continuing to monitor inflation.

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Federal Funds Open Rate

robrobiii
I don’t reckon they can go any lower, and not likely to increase them…

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Libor Rate Quote I have a question and also have its answer , problem is I dint understood the solution? Related to Arbitrage?

libor rate quote

Libor Rate Quote
Q. The 6 & 12 Months LIBOR are 5% and 6.5% respectively . A Bank is quoting 6/12 USD FRA (Forward Rate Agreement) @ 6.5%/6.75%. Is there any chance for Arbitrage available???

Please give ur answers with description in utmost simple language

Raysor
No. LIBOR is not traded it is just a rate that banks agree as a rate that they would theoretically borrow at. You probably have to look at SONIA (Sterling Overnight Interbank Average Rate), or US equivalent
PrivateBanker
Assuming your LIBOR quote is given in USD…

the implied 6/12 given by the 6 & 12 month quotes is:
(1 + 5/2) * (1+R/2) = 1.065
1.025 * (1 + R/2) = 1.065
(1+R/2) = 1.065/1.025
(1 + R/2) = 1.03924, so R/2 = 0.039024

For the FRA 6/12....(divide rate by 2 for the 6 month)
the bid is 0.065...0.065/2 = 0.0325...you can lend at the bid
the question is 0.0675...0.0675/2 = 0.03375...you can borrow at the question...

Here are your options....(use $ 1000)
borrow at 6 month spot, borrow at 6/12 forward question...in 12 months you will owe:
1000(1.025)(1.03375) = $ 1,059.59...

use the $ 1000 you borrowed above and...
lend it at 12 month spot...in 12 months you will receive:
1000(1.065) = $ 1,065...

payoff the loan of $ 1,059.59
you have made a riskless profit of: 1,065 - 1,059.59 = $ 5.41

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Discount Rate Dcf# If I am trying to perform a DCF to ascertain a franchise’s value, what is the discount rate I should use?

discount rate dcf

Discount Rate Dcf
Any finance types out there or franchise buyers who know how to reasonably value a franchise?

Joe R
Youre likely to get as many answers as you get answerers. Technically, if you risk adjust the cash flow, you use the risk free rate as the discount rate. If you do not risk adjust the cash flow, you use the risk free rate plus a risk premium. So if youre going to get $ 100 in a year, you could say its worth $ 95 now. If there is a 75% chance of getting $ 100 in a year, you discount $ 75 by the risk free rate. If you may get $ 100, you discount it by (for example) 5% + another 5, 10, 15 % or more because the cash flow is risky. Guessing this risk premium is what drives the market, underestimating it is whats causing problems in the mortgage market the past year, and guessing it for a franchise is something probably a few people in the USA could do well.

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