A corporation creates a sinking fund in order to have $590000 to replace some machinery in 9 years. How much should be placed in this account at the end of each month if the annual interest rate is 5.5% compounded monthly? (Round your answers to the nearest cent).$ How much interest would they earn over the life of the account? $ Determine the value of the fund after 2 years ______$ 5years ______$ 6 years How much interest was earned during the third month of the 5th year?

A corporation creates a sinking fund in order to have $590000 to replace some machinery in 9 years. How much should be placed in this account at the end of each month if the annual interest rate is 5.5% compounded monthly? (Round your answers to the nearest cent).$ How much interest would they earn over the life of the account? $ Determine the value of the fund after 2 years $ 5years $ 6 years How much interest was earned during the third month of the 5th year?

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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Q10. James decided to fund a school in Orange County in perpetuity. The first payment will be made three years from today (at the end of year three) and will be $5,320. Each year after that, the school will receive payment from James annually. The payment will increase at a rate of 3% per year after the first payment. If the annual interest rate is 9%, what is the present value of this endowment?
The PUR Foundation deposits $2,500,000 today in a fund earning 6% APR compounded monthly. What will be the value of this deposit 10 years later?
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.
Two years ago, a person borrowed $10,000 at 12% interest compounded monthly, which is to be paid in equal monthly payments over 5 years. Now the person acquired an additional fund of $3000. How much it would be worth at the end of the 5-year period if the monthly payment is then invested at 7% compounded monthly?
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
An endowment fund is providing an annual scholarship of P50,000 for the first five years, P60,000 for the next five years, and P90,000 thereafter. The fund will be established today and will award the first scholarship after a year. The fund earns 4.5 % annual interest. Find the present worth of this cost.
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.
The Cooper Foundation contributes $25,000 per year into an annuity fund for building a new zoo. The fund earns 7.5% interest. Find the amount in the fund at the end of 10 years. (Round your final answer to two decimal places.)
Dobsen Door Manufacturer s sets up sinking fund to raise $75000 to pay off the maturity value of a three year note. If the sinking fund earns 3.8% compounded monthly how much should they set aside each month?
A company has a $170,000 note due in 5 years. How much should be deposited at the end of each quarter in a sinking fund to pay off the note in 5 years if the interest rate is 9% compounded quarterly?
blem #1: $10,000 is used to purchase an appropriate size annuity that has level annual payments for 18 years. The price of the annuity is based on an effective annual rate of 11.2%. As each payment is received, it is put into a fund that earns an effective annual rate of 7%. (a) Determine the accumulated value of the investment at the end of 18 years. (b) If the $10,000 were put into a fund that was to produce the same final value after 18 years, what annual effective rate would that fund have to offer?
On January 1, you win $60,000,000 in the state lottery. The $60,000,000 prize will be paid in equal installments of $6,000,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31 of the current year. If the current interest rate is 6%, determine the present value of your winnings. Use the present value factor of annuity of $1 Show your work:

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