Andrew Bogut just received a signing bonus of 1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually. a) If Bogut plans to establish the AB Foundation once the fund grows to 1,999,000, how many years until he can establish the foundation? b) Instead of investing the entire 1,000,000, Bogut invests 300,000 today and plans to make 9 equal investments into the fund beginning one year from today. What amount should the payments be if Bogut plans to establish the 1,999,000 foundation at the end of 9 years.

Andrew Bogut just received a signing bonus of 1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually. a) If Bogut plans to establish the AB Foundation once the fund grows to 1,999,000, how many years until he can establish the foundation? b) Instead of investing the entire 1,000,000, Bogut invests 300,000 today and plans to make 9 equal investments into the fund beginning one year from today. What amount should the payments be if Bogut plans to establish the 1,999,000 foundation at the end of 9 years.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

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