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 di 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.

A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of one student each year in perpetuity at her university. To adequately prepare for the administration of the scholarship, the university will begin awarding it starting in three years. The estimated full cost of one student this year is $32,000 and is expected to stay constant in real terms in the future. If the scholarship is invested to earn an annual real return of 10 percent, how much must the donor contribute today to fully fund the scholarship? Note: Negative value should be indicated by a parenthesis. > Answer is complete but not entirely correct. $(240,421) X Contribution

A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of one student each year in perpetuity at her university. To adequately prepare for the administration of the scholarship, the university will begin awarding it starting in three years. The estimated full cost of one student this year is $38,000 and is expected to stay constant in real terms in the future. If the scholarship is invested to earn an annual real return of 5 percent, how much must the donor contribute today to fully fund the scholarship?

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.

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?

. James decided to fund a school in Orange County in perpetuity. The first payment will be made three years from today (at the end of year three) and will be $5,320. Each year after that, the school will receive payment from James annually. The payment will increase at a rate of 3% per year after the first payment. If the annual interest rate is 9%, what is the present value of this endowment?

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? $31212.92 $36512.92 $88626.65 $53000.00

13. Siegefried Basset is 65 years of age and has a life expectancy of 12 more years. He wishes toinvest $20,000 in an annuity that will make a level payment at the end of each year until his death. If theinterest rate is 8 percent, what income can Mr. Basset to receive each year?