Andrew Bogut just received a signing bonus of 1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually. a) If Bogut plans to establish the AB Foundation once the fund grows to 1,999,000, how many years until he can establish the foundation? b) Instead of investing the entire 1,000,000, Bogut invests 300,000 today and plans to make 9 equal investments into the fund beginning one year from today. What amount should the payments be if Bogut plans to establish the 1,999,000 foundation at the end of 9 years.
Andrew Bogut just received a signing bonus of 1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually. a) If Bogut plans to establish the AB Foundation once the fund grows to 1,999,000, how many years until he can establish the foundation? b) Instead of investing the entire 1,000,000, Bogut invests 300,000 today and plans to make 9 equal investments into the fund beginning one year from today. What amount should the payments be if Bogut plans to establish the 1,999,000 foundation at the end of 9 years.
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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Andrew Bogut just received a signing bonus of 1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually.
a) If Bogut plans to establish the AB Foundation once the fund grows to 1,999,000, how many years until he can establish the foundation?
b) Instead of investing the entire 1,000,000, Bogut invests 300,000 today and plans to make 9 equal investments into the fund beginning one year from today. What amount should the payments be if Bogut plans to establish the 1,999,000 foundation at the end of 9 years.
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