37. Calculate the present value of an ordinary annuity of $3,750 to be received each year for eight years, assuming an opportunity cost of 3 percent per year. 38. A generous philanthropist plans to make a one-time endowment to a renowned heart research center which would provide the facility with $85,000 per year into perpetuity. The rato of interest is expected to be 4.5 percent annually. How large must the endowment be? 39. James plans to fund his individual retirement account, beginning today, with an annual deposit of $2,000, which he will continue for the next 20 years. If he can earn an annual compound rate of 3 percent on his deposits, calculate the amount in the account upon his retirement.
37. Calculate the present value of an ordinary annuity of $3,750 to be received each year for eight years, assuming an opportunity cost of 3 percent per year. 38. A generous philanthropist plans to make a one-time endowment to a renowned heart research center which would provide the facility with $85,000 per year into perpetuity. The rato of interest is expected to be 4.5 percent annually. How large must the endowment be? 39. James plans to fund his individual retirement account, beginning today, with an annual deposit of $2,000, which he will continue for the next 20 years. If he can earn an annual compound rate of 3 percent on his deposits, calculate the amount in the account upon his retirement.
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
Related questions
Question
Pls if you can't solve all three parts pls skip and you can use excel or text but font give handwritten thanks will definitely like
Transcribed Image Text:37. Calculate the present value of an ordinary annuity of $3,750 to be received each year for
eight years, assuming an opportunity cost of 3 percent per year.
38. A generous philanthropist plans to make a one-time endowment to a renowned heart
research center which would provide the facility with $85,000 per year into perpetuity. The rate
of interest is expected to be 4.5 percent annually. How large must the endowment be?
39. James plans to fund his individual retirement account, beginning today, with an annual
deposit of $2,000, which he will continue for the next 20 years. If he can earn an annual
compound rate of 3 percent on his deposits, calculate the amount in the account upon his
retirement.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 3 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education