A favorite aunt wishes to establish a trust fund for her niece's math education. Howmuch should she set aside now if she wants $45, 000, 7 years from now, and interest iscompounded continuously at 5%?O $45,000(1.05)-7O $45,000e-1.95$45,000e-0.35O $45,000e-0.05O $45,000(1.05)- -0.35

Money's value in the present or the future can be calculated using the financial concept of time…

Answered: A favorite aunt wishes to establish a…

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 you are working with the foundation to fund a scholarship in your name. Currently, the foundation can earn a 5 percent return on any donations. A. How much money would you need to donate to fund a scholarship that pays $25,000 every year forever, starting one year from now? B. How much money would you need to donate if the foundation could increase their return to 7 percent on any donations?
A trust notifies you that you are entitled a grant that would give you annual payments of $6,200 per year in perpetuity. The first payment will be made to you three years later (at the end of year 3). The annual interest rate is 10% (APR). What is the present value of the grant? A. 56,363.64 B. 46,581.52 C. 51,239.67 D. 62,000.00
Your grandmother just died and left you $47,500 in a trust fund that pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at the beginning of each of the next 3 years and end up with zero in the account? a. $3,087.50 b. $13,865.38 c. $10,120.08 d. $16,840.23 e. $13,019.14
You would like to give your son $70,000 towards his college education 12 years from now. How much money must you set aside today for this purpose if you can earn 8% on your investments? B. $176.271.91 C. $27.797.96 A. $12.250.00 interest rate, you will triple your money in ately D. $3,688.65 E. $14.211.11
Jeremiah Wood wants to set up a fund to pay for his daughter's education. In order to pay her expenses, he will need $22,000 in four years, $23,400 in five years, $24,600 in six years, and $26,100 in seven years. If he can put money into a fund that pays 5 percent interest, what lump-sum payment must Jeremiah place in the fund today to meet his college funding goals? Round the answer to the nearest cent. Round PV-factor to three decimal places.
4. Mr. Richman has offered to give the New Life Hospice Center $100,000 today or $300,000 when he dies. If the hospice center earns 14% on its investments, and it expects Mr. Richman to live for 12 years, which alternative should they take? Take the gift now or later? Discuss in narrative and include your calculations and citations with your answer.
In a family members will, they would like to establish a perpetual trust to provide for the maintenance of a school's learning lab. If the annual maintenance is fixed at $12,500 per year and the trust can earn 5% interest, how much money must be set aside in the trust?

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A favorite aunt wishes to establish a trust fund for her niece's math education. How much should she set aside now if she wants $45, 000, 7 years from now, and interest is compounded continuously at 5%? O $45,000(1.05)-7 O $45,000e-1.35 O$45,000e-0.36 $45,000e-0.05 O $45,000(1.05)-0.35