On Chris’ 4th birthday, his great aunt gives him $120,000. His parents place the money in an investment paying 10% simple interest. a) Find the value of the fund on Chris’ 21st birthday. b) Find the amount of interest the fund earned.

Q: eremiah Wood wants to set up a fund to pay for his daughter's education. In order to pay her…

A: Amount needed in 4 years (CF1) = $25,000 Amount needed in 5 years (CF2) = $26900 Amount needed in 6…

Q: Alex has set up a sinking fund for his son's college education in 10 years. From now on, he can save…

A: The first part of the question is asking for the future value of an ordinary annuity. The formula…

Q: Emma wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity.…

A: Annual rate "r" is 5% number of compounding "m"= 4 Present value of the donation amount = $1000000…

Q: A father is planning a savings program to put his daughter through college. His daughter is now 13…

A: Annuity payment Annuity payments are money invested or deposited on a regular interval such as…

Q: Yumi's grandparents presented her with a gift of $12,000 when she was 9 years old to be used for her…

A: Future Value: The worth of the asset at some future date based on the assumed rate of growth is…

Q: Mia will retire 10 years from now and wants to establish a fund today that will pay $48,000 cash at…

A: Deposited amount refers to the amount which is kept aside for investing in a fund for receiving the…

Q: Bart is a college student who has never invested his funds. He has saved ​$540 and has decided to…

A: An initial investment accumulates interest. The future value is the accumulated value of the initial…

Q: Demitri's parents begin saving for his college fund when Demetri is 10 years old. They invest $5,000…

A: Money Deposited when Demetri is 10 = $5000 Interest rate =1.2% compounded annually Years = 18-10 = 8…

Q: Your grandfather placed $5,000 in a trust fund for you. In 12 years what will be the worth of the…

A: Solution:- When an amount is invested, it earns interest.  The amount initially invested is called…

Q: A professor has two daughters that he hopes will one day go to college. Currently, in-state students…

A: Present value refers to the discounted value of the future cash flows at the required rate of return…

Q: Jeremiah Wood wants to set up a fund to pay for his daughter's education. In order to pay her…

A: The lump sum payment today is calculated using the following present value equationWhere, CFi is the…

Q: ex has set up a sinking fund for his son's college education in 10 years. From now on, he can save…

A: Sinking funds are amount of deposit required for the future planning requirements needed in the…

Q: Lisa invested $5000 in a fund for 5 years and was paid simple interest. The total interest that she…

A: P = $5000 T = 5 SI = $1000 Where, P = Principal T = Time (No. of years) SI = Simple Interest

Q: The Clark family began savings for their child's college 18 years ago. Each year they contributed…

A: Future value refers to the total value of an investment or deposit at a specified date in the…

Q: Donna is 40 years old today and she wishes to accumulate $2,240,000 by her sixty fifth birthday so…

A: SOLUTION- LET THE AMOUNT TO BE DEPOSITED ANNUALLY =X RATE OF INTEREST =6% P.A CURRENT AGE =40 YEARS…

Q: The Clark family began savings for their child's college 17 years ago. Each year they contributed…

A: The future value refers to the future value of all cash flows compounded at interest rate for the…

Q: Emma wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity.…

A: Donation amount=$1000000Interest rate=4.12%Annual scholarship after 2.5 years.

Q: Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will…

A: The present value of any future payment or cash flow is its discounted value for the defined number…

Q: what will be the size of each installment?

A: Information Provided: College fund interest rate = 4% p.a. Tax free account = 3.5% compounded…

Q: You would like to establish a fund that will be used to offer a scholarship each year to a worthy…

A: Present value refers to the discounted value of the future cash flow. These future cash flows are…

Q: Emma wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity.…

A: Step 1 The quantity of the regular cash flows is simply divided by the discount rate to get the…

Q: Thomas Finley wishes to become a millionaire. His money market fund has a balance of $183,204 and…

A: A money market fund is mutual fund that invests in liquid financial instruments. These instruments…

Q: please answer within the format by providing formula the detailed working Please provide answer in…

A: This entails the application of time value of money concepts. Periodic deposits grow into a higher…

Q: 6- Linda O'Shay deposited $50,000 in a savings account as a perpetual trust. She believes the…

A: Scholarship refers to the term which is defined as the financial aid that is awarded to the students…

Q: When Derrick turned 15, his grandparents put $10,000 into an account that yielded 1.4% interest,…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: The Clark family began savings for their child's college 11 years ago. Each year they contributed…

A: Here,Annual Contribution for 11 years is $8,000Addition Contribution in second years is…

Q: size of each installment

A: This question is based on the concept of time value of money. It is used to calculate the value of…

Q: A father has decided to set aside a one time lump sum for college that will amount to $60,000 by the…

A: The objective of this question is to find out the present value of an investment that will grow to…

Q: A trust fund for a 8 - year - old grandchild is being set up by her grandfather. The objective of…

A: Annuity can be defined as the series of equal payments into a fund account. In this account interest…

Q: Carl is the beneficiary of a $28,000 trust fund set up for him by his grandparents. Under the terms…

A: Annuity = Present Value / PVA of $1

Q: Yumi's grandparents presented her with a gift of $21,000 when she was 8 years old to be used for her…

A: Time value of money is a financial concept which is used to calculate the value of money in present…

Q: When Steven was 5 years old (on his birthday), his grandmother decided to set up a trust account to…

A: The amount to be deposited today is the present value of amount to be received on 18th birthday.…

Q: Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will…

A: The present value (PV) of a future sum of money or stream of cash flows is the current value,…

Q: Assume you are working with the foundation to fund a scholarship in your name. Currently, the…

A: Since payment is due for indefinite period, we need to use PV of perpetuity formula to calculate…

Q: When Joe graduated from college at age 22, his grandparents established a trust fund and endowed it…

A: Future value is the value of annuity at the end of a defined period. This can be calculated by…

Q: Isabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000…

A: The future value function can be used for determining the future value of a present sum, or the…

Q: .What was size of the investment in the fund if it was earning 5.50% compounded semi-annually?

A: Present Value of Perpetuity Due: It refers to the present worth of the annuity payments made for…

Q: Your grandfather wants to establish a scholarship in his father’s name at a local university and has…

A: Perpetuity type of annuity pay the money forever and the present value of perpetuity depends on the…

Q: Ben invested $7,500 twenty years ago with an insurance company that has paid him 6 percent simple…

A: Compound interest is the process of earning interest on accumulated interest. It differs from simple…