1. What amount must be invested today at 8.0% compounded annually to fund the scholarship program in perpetuity?  2. Given the current economic climate the CEO has lowered the initial investment amount you had available to $100,000, how much do you now have for the Country Club membership program?

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
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HR wants to offer a Country Club membership for a group of employees that will cost the company $10,000 dollars a year. They will begin annually starting one year from now. 

 

1. What amount must be invested today at 8.0% compounded annually to fund the scholarship program in perpetuity? 

2. Given the current economic climate the CEO has lowered the initial investment amount you had available to $100,000, how much do you now have for the Country Club membership program?

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