3. A company sets up a quarterly award to recognize the hard work and dedication of one employee per quarter. The award is $200 every three months for the first 4 years (16 awards). After that, the award increases by 1.5% per quarter for 3 years (12 awards), followed by a 1% per quarter increase thereafter. If the interest rate is ja = 8%, how much money does the company need to set aside today to fund this award forever?

3. A company sets up a quarterly award to recognize the hard work and dedication of one employee per quarter. The award is $200 every three months for the first 4 years (16 awards). After that, the award increases by 1.5% per quarter for 3 years (12 awards), followed by a 1% per quarter increase thereafter. If the interest rate is ja = 8%, how much money does the company need to set aside today to fund this award forever?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

A state lotto has a prize that pays $2,000 each week for 25 years. Find the total value of the prize: $2600000 If the state can earn 5% interest on investments, how much money will they need to put into an account now to cover the weekly prize payments? 1155555.556 0 Reminder: There are 52 weeks in a year.
11. A loan of P 200, 000 received today is to be cancelled by making ten equal semi-annual payments starting at the end of two years. How much is the semi-annual payment, if interest is charged at 10% compounded semi-annually? 12. A man wants to have P 500, 000 to pay for the downpayment of a new house. In order to have this money, he sets up a fund earning 12% compounded monthly and deposits P 50, 000 at the end of each month for as long as necessary. When is the earliest time will he have at least P 500, 000 in the fund?
A state lotto has a prize that pays $500 each week for 35 years.Find the total value of the prize: $ If the state can earn 6% interest compounded weekly on investments, how much money will they need to put into an account now to cover the weekly prize payments?$ Reminder: There are 52 weeks in a year.
10.- The Arriba México foundation donated $2,000,000 to a charitable institution. The money was deposited in an account that pays an annual interest rate of 14% compounded monthly. How much can the institution withdraw each month if the withdrawals are in advance and intended to be indefinite? options: 22,621.15 25,018.24 24,999.95 23,064.25
Can anyone help me to answer this ?
You donate $20,000,000 to Greensboro College’s new teacher bonus program. What size annual bonus can be awarded forever if the account pays 3% compounded monthly? The first bonus will be given one year after the deposit of the $20,000,000.
43. A small business owner contributes $3000 at the end of each quarter to a retirement account that earns 8% com- pounded quarterly. (a) How long will it be until the account is worth $150,000? (b) Suppose when the account reaches $150,000, the business owner increases the contributions to $5000 at the end of each quarter. What will the total value of the account be after 15 more years?
A downtown bank promises its potential employees a $ 8000 sign-on bonus, an additional bonus of $ 12000 two years from now, an additional bonus of $ 19000 four years from now, and an additional bonus of $ 23000 six years from now. Lavanya was hired today but only intends to work for this bank for three years. What is the present value of this bonus payment structure to her? (Assume that money is worth 8% p.a. compounded quarterly)
The National Research Council is considering the establishment of a perpetuity to fund faculty positions at a local university. The ongoing cost will be $9500 at the end of each month. If the money can earn 6.3% compounded monthly in perpetuity, what amount to be invested now is required to fund the perpetuity? Select one: a. $301,587 b. $1,819,024 c. $160,294 d. $612,675 e. $1,809,524
A state lotto has a prize that pays $1,000 each week for 25 years. Find the total value of the prize: $ 1300000 If the state can earn 4% interest on investments, how much money will they need to put into an account now to cover the weekly prize payments? Reminder: There are 52 weeks in a year.
Volvo company want to invest a lump sum amount that will provide the company with $10,000 at the beginning of every month in perpetuity to help pay for its employees' monthly salaries. How much should be invested in a fund that provides an interest rate of 10% compounded quarterly?
43. The Bluebird Company has a $10,000 liability it must pay three years from today. The company is opening a savings account so that the entire amount will be available when this debt needs to be paid. The plan is to make an initial deposit today and then deposit an additional $2,500 a year for the next three years, starting one year from today. The account pays a 3% rate of return. How much does the Bluebird Company need to deposit today? A. $1,867.74 B. $2,079.89 C. $3,108.09 D. $4,276.34 E. $4,642.28

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