Mike wants to donate $5,000,000 to establish a fund to provide anannual scholarship in perpetuity. The fund will earn an interest rate of4.93% p.a. compounded half - yearly (j2 = 4.93% p.a.) and the firstscholarship will be first awarded 3.5 years after the date of thedonation. (a) What is the amount of the annual scholarship (roundedto two decimal places)? Question 9Answer a. 139208.15 b. 283816.22 c. 278013.64 d. 281847.77

Donation amount=$5,000,000Interest rate=4.93%Annual scholarship after 3.5 years.

Answered: Mike wants to donate $5,000,000 to…

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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O You just received a $5,000 gift from your grandmother which you have decided to save and then gift to your own grandchildren 50 years from now. How much additional money will you gift if you earn 6.5 percent interest rather than 6 percent interest over the next 50 years? (Assume annual compounding.) O $39,318.09 O $38,211.16 O $24,432.62 O None of these answers are correct O $39,464.79
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?
Ac
am. 168.
1. Let the annual interest rate be 6 %. Compute 871 Enter an answer correct to 6 decimal places. ä7 Enter an answer correct to 6 decimal places. 2. A fund is to be created which pays out a scholarship of £8,000 every year in perpetuity. The first scholarship will be paid out in 9 years' time. Assuming an interest rate of 2%, how much should be paid into the fund? £ Enter an answer correct to 2 decimal places.
Question 2 Pam Beesly is 39 years old today and she wishes to accumulate $513,000 by her 63rd birthday so she can retire. She wishes to accumulate this amount by making equal deposits on her 39th through her 62th birthdays. What annual deposit must Pam make if the fund will earn 8% interest compounded annually? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Pam must make an annual deposit of $?
Help pls thank you!
(b) Chris Hitchcock is 43 years old today and he wishes to accumulate $512.000 by his 65 th birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal deposits on his 43 th through his 64 th birthdays. What annual deposit must Chris make if the fund will earn 8% interest compounded annually? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Annual deposit eTextbook and Media Save for Later Attempts: unlimited Submit Answer %24
Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 4.57% p.a. compounded half-yearly (j2=4.57% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation. (a) What is the amount of the annual scholarship (rounded to two decimal places)? Question 9 Answer a. 127913.37 b. 255507.69 c. 260410.57 d. 258749.57 Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 4.57% p.a. compounded half-yearly (j2=4.57% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation. (b) Assume that two years after the donation, Mike needs to withdraw $1,000,000 from the fund and use the remaining amount to provide an annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years after the date of the donation). What is the new annual…
Mike wants to donate S5, 000, 000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 5.37% p.a. compounded half-yearly (j2 = 5.37% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation. (a) What is the amount of the annual scholarship (rounded to two decimal places) ? Question 9 Answer a. 313037.32 b 306010.79 с. 153267.24 d. 310649.70
Could you show me formulas and solutions, thank you
12. When Alfred Nobel died, he left the majority of his estate to fund five prizes, each to be awarded annually in perpetuity starting one year after he died. (The sixth one, in economics, was added later.) a. If he wanted the cash award of each of the five prizes to be $55,000 and his estate could earn 8% per year, how much would he need to fund his prizes? b. If he wanted the value of each prize to grow by 4% per year (perhaps to keep up with inflation), how much would he need to leave? Assume that the first amount was still $55,000. c. His heirs were surprised by his will and fought it. If they had been able to keep the amount of money you calculated in b and had invested it at 8% per year, how much would they have in 2014, 118 years after he died? to fund his prizes. a. He would need $ (Round to the nearest dollar.) b. He would need $ (Round to the nearest dollar.) c. His heirs would have $ (Round to the nearest million.) to fund his prizes. million.

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