Morphosis Pty(Ltd) is an investment bank that plans to offer a bursary in five years time to one top-performing third-year finance student at UCT. The bank plans to fund one student each year and is offering R60000 per student. The bursary will only be offered for six years and will therefore cease thereafter. How much should Morphosis Pty(Ltd) save each year from today in order to successfully implement the bursary in five years? Assume the bank plans to invest in a diversified mutual fund that will earn 12% p.a. on average.

Morphosis Pty(Ltd) is an investment bank that plans to offer a bursary in five years time to one top-performing third-year finance student at UCT. The bank plans to fund one student each year and is offering R60000 per student. The bursary will only be offered for six years and will therefore cease thereafter. How much should Morphosis Pty(Ltd) save each year from today in order to successfully implement the bursary in five years? Assume the bank plans to invest in a diversified mutual fund that will earn 12% p.a. on average.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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