Carl is the beneficiary of a $ 20,000 trust fund set up for him by his grandparents. Under the terms of the trust, he is to receive the money over a 5-year period in equal installments at the end of each year. If the fund earns interest at the rate of 5%/year compounded annually, what amount will he receive each year? (Round your answer to the nearest cent.) $

Carl is the beneficiary of a $ 20,000 trust fund set up for him by his grandparents. Under the terms of the trust, he is to receive the money over a 5-year period in equal installments at the end of each year. If the fund earns interest at the rate of 5%/year compounded annually, what amount will he receive each year? (Round your answer to the nearest cent.) $

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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Carl is the beneficiary of a $24,000 trust fund set up for him by his grandparents. Under the terms of the trust, he is to receive equal installmentsfrom this fund at the end of each year over a 5 year period. If the fund earns interest at the rate of 8%/year compounded annually, what amount will he receive each year?Assume that the balance in the fund is zero after the last installment is recieved ( round your answer to the nearest cent)
A young man is the beneficiary of a trust fund established for him 21 years ago at his birth. If the original amount placed in trust was $50,000, how much will he receive if the money has earned interest at the rate of 8%/year compounded annually? Compounded quarterly? Compounded monthly?
Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 4.47% p.a. compounded half-yearly (2=4.47% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation. (b) Assume that two years after the donation, Mike needs to withdraw $1,000,000 from the fund and use the remaining amount to provide an annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years after the date of the donation). What is the new annual scholarship amount (rounded to two decimal places)? a. 101959.37 O b. 206197.54 O c. 203631.53 O d. 207511.86
Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 3.43% p.a. compounded half-yearly (j2=3.43% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation. (b) Assume that two years after the donation, Mike needs to withdraw $1,000,000 from the fund and use the remaining amount to provide an annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years after the date of the donation). What is the new annual scholarship amount (rounded to two decimal places)?
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Sam wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4-3.81% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation. (b) Assume that the fund's earnings rate rate has changed from 4-3.81% p.a. to j4-3.56% p.a. one year before the first scholarship payment. How much does Sam need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)? Question 9Answer a. 78309.64 b. 74276.05 C. 71226.96 d. 75395.75
In 18 years, Maggie Beechwood is to receive $100,000 under the terms of a trust established by her grandparents. Assuming an interest rate of 5.7%, compounded continuously, what is the present value of Maggie's legacy? The present value of the legacy is $ (Round to the nearest cent as needed.)
A young man is the beneficiary of a trust fund established for him 18 years ago at his birth. If the original amount placed in trust was $20,000, how much will he receive if the money has earned interest at the rate of 5%/year compounded annually? Compounded quarterly? Compounded monthly? (Round your answers to the nearest cent.) compounded annually $ compounded quarterly $ compounded monthly $
Your grandparents would like to establish a trust fund that will pay you and your heirs $120,000 per year forever withthe first payment one year from today. If the trust fund earns an annual return of 2.3 percent, how much must yourgrandparents deposit today?Multiple Choicea. $5.217.391.30B. $4,347,826.09 C. $4,816,053.51D. $4,565,217.39E. $5.962.732.92
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