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 3.87% p.a. compounded half-yearly (2-3.87% p.a.) and the first scholarship will be first awarded 3.5 years after the date of thedonation.(a) What is the amount of the annual scholarship (rounded to two decimal places)?a. 212767.99b. 106479.89c. 216169.57d. 215020.17

To determine the amount of the annual scholarship that Mike can establish, we need to calculate the…

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
am. 168.
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(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
2. Trixy needs to accumulate 780,000.00 for her insurance investment for 5 years. She set up a sinking fund for the said amount that earns 7.5 % interest compounded semi-annually. Construct a sinking fund schedule for her investment.
Don Jose deposited ₱5,000,000 on a bank that earns 10% compounded annually. Five years later he died. His will states that his beneficiary is an orphanage which will be receiving the money in perpetuity a year after he died. How much is the yearly fund the orphanage will be receiving?
Bradley set up a fund that would pay his family 3500 at the beginning of every month, in perpetuity.What was size of the investment in the fund if it was earning 5.50% compounded semi-annually?
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…
Bill makes deposits of 2,700 at the end of each year for n years into a fund. At time n, he uses the accumulated value of the fund to purchase an annuity immediate that makes payments of 197,909.20 at the end of each year for 5 years. The annual effective interest rate is 15%. Calculate n. O a. 26 O b. 29 O c. 28 O d. 24 O e. 22
Solve by using the sinking fund or amortization formula. Betty Price purchased a new home for $245,000 with a 10% down payment and the remainder amortized over a 15 year period at 9% interest. (a) What amount (in $) did Betty finance? $ (b) What equal monthly payments (in $) are required to amortize this loan over 15 years? (Round your answer to the nearest cent.) $ (c) What equal monthly payments (in $) are required if Betty decides to take a 20 year loan rather than a 15 year loan? (Round your answer to the nearest cent.) $
Your grandmother left you an inheritance in the form of a trust. The trust agreement states that you are to receive R2 500 on the first day of each year, starting immediately and continuing for fifty years. What is the value of this inheritance today if the applicable discount rate is 6,20%? a. b. d. R66 811,30 R40 706,92 R39 942,42 R49 942,42
Mr. Glen Secundo won a lottery paying P1,400,000 at the beginning of each year for 15 years. Find the amount must set aside today to satisfy this annuity at 13% compounded annually.

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