3. (15 pts) A permanent scholarship fund has been established through a donation of $500,000 at time zero,$100,000 in year one, $150,000 in year two, and amounts increasing by $50,000 per year through year ten. At aninterest rate of 10% per year, the amount that could be withdrawn forever beginning in year 11 is nearest:A) $225,903B) $385,931C) $585,931D) $2,259,000

The objective of the question is to calculate the amount that could be withdrawn forever beginning…

Answered: 3. (15 pts) A permanent scholarship…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume UMASS Boston just received 10 million dollars from a major donor and the school's fund can earn a 4.5% interest rate (compounded yearly). If the school uses the interest to payout yearly scholarships, how much can the school payout in yearly scholarships due to this donation? (Please use at least 5 decimal places and do not use $ symbol in the answer)
What sum of money must be deposited in a trust fund to provide a scholarship of $1550, quarterly for infinite period, if interest is 7.2% compounded quarterly? (Money should be rounded to 2 decimal place) USE ONLY CALCULATOR TO CALCULATE YOUR ANSWERS. PMT VY CAY 1 PV 1550 0.072 4 0.018 86111.11 4
Q7. On September 1, 2014, a university received a grant of $100,000 from Tajinder. The money is invested at 8% compounded quarterly. The grant is to be used to pay out semi-annual scholarships for 20 years. What is the size of each scholarship if the first one is awarded on September 1, 2016?
Could you show me formulas and solutions, thank you
5. An amount is deposited for eight years at 6%. If compounding occurs semiannually, then the table value is found at a) 6% for eight periods. b) 3% for eight periods. 3% for 16 periods. 6% for 16 periods 6. Sue Gray wants to withdraw $10,000 (including principal) from an investment fund at the beginning of each year for three years. How should she compute her required initial. investment at the beginning of the first year if the fund earns 12% compounded quarterly? a) $10,000 times the present value of a 3-period, 12% annuity due of 1. $10,000 times the present value of a 12-period, 3% annuity due of 1. $10,000 times the present value of a 3-period, 12% ordinary annuity of 1. d) $10,000 times the present value of a 12-period, 3% ordinary annuity of 1. moro Pr
The University is given a gift of $500000 for the construction of a School of Management building. The University invests the gift into an account for future use. The University receives 8.00% on the money for 7 years then the rate drops to 6.40%. If the building is constructed 23 years after the gift was received, how much is in the fund at that time? S Do not use dollar signs or commas in your answer. Include two decimals. in your answer.
NEED ASAP
Project for Ma Consider a nominal prize of one million dollars, to be paid in twenty annual payments of $50,000. Assume when each payment is made, the recipient immediately pays Federal income tax at a 25% rate and invests the rest. Assume the funds invested eam 6% per year, with both Federal taxes paid from that income and the remainder reinvested. The Assignment 1. Determine the total amount of money the winner will have at the end of twenty years. This will be one year after the last payment 2. Determine the amount the winner would have had at the end of twenty years if he or she had been given one million dollars all at once under the same conditions regarding taxes and Investment. 3. Determine the amount for a lump sum payment that would leave the winner with the same amount as the annuity after twenty years. 1. Discuss assumptions that were made to simplify this assignment along with important factors that have been omitted.

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