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era y enough money to provide for her living. 1s that $3000 a month will amply provide fo eds. She will establish a trust fund at a bank s 3% interest, compounded monthly. Upor

era y enough money to provide for her living. 1s that $3000 a month will amply provide fo eds. She will establish a trust fund at a bank s 3% interest, compounded monthly. Upor

Essentials Of Investments
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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An elderly lady decided to distribute most of her con- siderable wealth to charity and to keep for herself only enough money to provide for her living. She feels that $3000 a month will amply provide for her needs. She will establish a trust fund at a bank that pays 3% interest, compounded monthly. Upon her death, the balance is to be paid to her niece, Susan. If she deposits enough money to last forever, how much will Susan receive when her aunt dies?
Transcribed Image Text:An elderly lady decided to distribute most of her con- siderable wealth to charity and to keep for herself only enough money to provide for her living. She feels that $3000 a month will amply provide for her needs. She will establish a trust fund at a bank that pays 3% interest, compounded monthly. Upon her death, the balance is to be paid to her niece, Susan. If she deposits enough money to last forever, how much will Susan receive when her aunt dies?
Which process line should be built for a new chemical? The expected market for the chemi- cal is 20 years. A 9% rate is used to evaluate new process facilities, which are compared with present worth. How much does the better choice save? First O&M Cost Cost/year Salvage Life A $18M $5M $4M 10 years В 25M 3M 6M 20 years
Transcribed Image Text:Which process line should be built for a new chemical? The expected market for the chemi- cal is 20 years. A 9% rate is used to evaluate new process facilities, which are compared with present worth. How much does the better choice save? First O&M Cost Cost/year Salvage Life A $18M $5M $4M 10 years В 25M 3M 6M 20 years
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