9:30 AM Class Group 3


Math 1070Q
Group 3 - 9:30 Class
Project Members: Michael Bogush, Frank Caruso, Timothy Gaipa, Blayze
Markoya, Steven Panzella, Shawn Smith

(1)
0. 35000 -2100
1. 72100 ˆ 4326
2. 111426 ˆ 6,685.56
3.153111.56 ˆ 9,186.6936
4. 197298.2536 ˆ 11837.89522
5. 244136.148 ˆ 14648.1689
6. 293784.316 ˆ 17627.0590
7. 346411.375 ˆ 20784.6825
8. 402196.057 ˆ 24131.7634
9. 461327.82 ˆ 27679.6692
10. 524007 ˆ 31440.4493
11. 590447.938 ˆ 35426.8763
12. 660874.814 ˆ 39652.4888
13. 735527.302 ˆ 44131.6381
14. 814658.940 ˆ 48879.5364
15. 898538.476 ˆ 53912.3085
16. 987450.784 ˆ 59247.0470
17. 1081697.83 ˆ 64901.8698
18. 1181599.7 ˆ 70895.9819
19. 1287495.68 ˆ 77249.7409
20. $1,364,745.42 TOTAL

(2) A=P(1+r/n)^ntA = 700000(1+.06/1)^.120A= $2,244,994.83 TOTAL

(3) 1364745.42=P(1+.06/1)^.120P= $425,534.07 TOTAL

(4) Lump sum payment with out investment gives you a greater amount of
money at once, but at the same time you are losing a good portion of your
money because of taxes. If it is a lump sum payment with investment, you
would be getting a much greater amount then with out investment, because
of the ability to attain a positive return on the investment. If you were
to take payments with annuity you would be getting more money than if you
were to take it as a lump some with out investment. But the con to this is
that it would take far too long to acquire the money you won. Patience
would be virtue.

(5) In order to simplify this assignment, we assumed that certain factors
such as tax and earnings from interest would remain at fixed rates. In the
problem, federal income tax was 25%, CT income tax would be 5%, and the
returns on investment was said to be 6% per year, with both federal and
income taxes paid from that income and the remainder invested. While it is
obvious that in real-world situations, factors such as federal and state
taxes would be variable rather than fixed rates, and also obvious that
cash flow from investments could vary greatly from year to year, we
omitted them in order to simplify our assignment and make the
calculations. If we did not do this, it would have been virtually
impossible to calculate the amount of money one would have due to
real-world conditions that effect tax and investments greatly, all of
which are out of our hands (for example: inflation, a depression,
recession, stock market crash, etc.).