**Problem Statement:**William wants to establish a scholarship fund at his former university. He would like the recipients to receive an annual $5300 award starting next year. He would like to fund 10 years of these awards. Assuming the university can earn 11% on their donated funds, how much of a donation must William make today to fund the scholarships?**Options:**- $31,212.92- $36,512.92- $88,626.65- $53,000.00**Explanation:**This is a problem about calculating the present value of an annuity. The task is to determine the present value of 10 annual payments of $5300, using an interest rate of 11%. The correct donation amount will ensure that William's scholarships are fully funded for the entire period.

Present value (PV) is the present value of a future quantity of money or cash flow stream, assuming…

Answered: William wants to establish a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Steve Weatherspoon, a super salesman contemplating retirement on his ffty-ffth birthday, decides to create a fund on an 9% basis that will enable him to withdraw $ 16,000 per year on June 30, beginning in 2024 and continuing through 2027. To develop this fund. Steve intends to make equal contributions on June 30 of each of the years 2020-2023. What are Steve's contributions to the fund ?
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To establish a scholarship fund forever at Toronto Metropolitan University paying $10000 annually if the fund will earn interest at 4% and the first payment will be made • immediately, one needs $ • 6 years from now, one needs $ Round your answers to the nearest integer and do not use, in your answers, e.g., input 21356, not 21,356.
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Assume UMASS Boston just received 10 million dollars from a major donor and the school's fund can earn a 4.5% interest rate (compounded yearly). If the school uses the interest to payout yearly scholarships, how much can the school payout in yearly scholarships due to this donation? (Please use at least 5 decimal places and do not use $ symbol in the answer)
An Allied Health Scholarship fund wants to insure that it can provide $50,000 annually in scholarships forever How much money would have to be reinvested each year at 8% interest to generate the funds for the scholarships?
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
Imagine you are a philanthropist who would like to donate to a charity that provides shelter and assistance to homeless individuals. You would like to donate enough money to the charity to ensure that they can provide shelter for 12 homeless individuals every year in perpetuity. The cost of providing shelter per individual is $60 per day. If your investment fund pays a return of 2% per year, how much do you need to donate to the charity now so that they can provide shelter for 1200 individuals every day in perpetuity? Enter your answer to the nearest cent (two decimal places)
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.
Jeremiah Wood wants to set up a fund to pay for his daughter's education. In order to pay her expenses, he will need $22,000 in four years, $23,400 in five years, $24,600 in six years, and $26,100 in seven years. If he can put money into a fund that pays 5 percent interest, what lump-sum payment must Jeremiah place in the fund today to meet his college funding goals? Round the answer to the nearest cent. Round PV-factor to three decimal places.
4. Mr. Richman has offered to give the New Life Hospice Center $100,000 today or $300,000 when he dies. If the hospice center earns 14% on its investments, and it expects Mr. Richman to live for 12 years, which alternative should they take? Take the gift now or later? Discuss in narrative and include your calculations and citations with your answer.
10. Mr. Smart wants to set up an annual scholarship by donating $50 000 to the scholarship fund of his university. If the first payment is to be made in 5 years and interest is 4% compounded annually, what is the amount of the annual scholarship?

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