The trustees of a college have accepted a gift of $175,000, but are required to deposit it in an account paying 10% per year, compounded semiannually. They may make equal withdrawals at the end ofeach six-month period, but the money must last 7 years.(a) Find the amount of each withdrawal.(b) Find the amount of each withdrawal if the money must last 9 years.(a) The amount of each withdrawal is $(Round your answer to the nearest cent.)

Here, Amount DepositedToday $1,75,000.00Interest Rate10%Compounding Period (Semi Annual)2Withdrawal…

Answered: The trustees of a college have accepted…

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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Similar questions

A corporation creates a sinking fund in order to have $510,000 to replace some machinery in 12 years. How much should be placed in this account at the end of each quarter if the annual interest rate is 6.3% compounded quarterly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? $ Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $ 6 years $ How much interest was earned during the fourth quarter of the 5th year? $
The Cooper Foundation contributes $25,000 per year into an annuity fund for building a new zoo. The fund earns 7.5% interest. Find the amount in the fund at the end of 10 years. (Round your final answer to two decimal places.)
A corporation creates a sinking fund in order to have $790,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each week if the annual interest rate is 5.8% compounded weekly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $ 6 years $ How much interest was earned during the fourth week of the 4th year?
How much can be paid in scholarship at the beginning of each month if $238,500 is deposited in a trust fund if interest is 4.6% compounded monthly?
The University is given a gift of $500000 for the construction of a School of Management building. The University invests the gift into an account for future use. The University receives 8.00% on the money for 7 years then the rate drops to 6.40%. If the building is constructed 23 years after the gift was received, how much is in the fund at that time? S Do not use dollar signs or commas in your answer. Include two decimals. in your answer.
Theodore makes beginning of year deposits of 3000 for 10 years into a fund earning interest at an annual effective interest rate of 5%. At the end of each year, the interest earned is deposited into a second fund earning interest at an annual effective interest rate of 6%. Find the total accumulated value of his assets at the end of 10 years.
Mr. Deneau accumulated $98000 in an RRSP. He converted the RRSP into a RRIF and started to withdraw $5400 at the end of every three months from the fund. If interest is 4.1% compounded annually, for how long can Mr. Deneau make withdrawals? State your answer in years and months (from 0 to 11 months).
Find the periodic payment for each sinking fund that is needed to accumulate the given sum under the given conditions. (Round your answer to the nearest cent.) FV = $1,500,000, r = 4.7%, compounded semiannually for 25 years
You are given: i. Fund X accumulates at an interest rate of 8% compounded quarterly. ii. Fund Y accumulates at an interest rate of 6% compounded semiannually. iii. At the end of 10 years, the total amount in the two funds combined to $1000. iv. At the end of 5 years, the amount in Fund X is twice that in Fund Y. Calculate the total amount in the two funds at the end of 2 years.

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