determine the quarterly installment that should be deposited into the fund.

Jennifer is planning a trip to Alaska in 5 years. She has calculated that she will need $15,000 to cover her expenses.  Her bank offers money market investments at a rate of 4.5% compounded annually.  What should Jennifer invest now to have the needed funds?

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

Clarissa wants to fund a growing perpetuity that will pay $10,000 per year to a local museum, starting next year.  She wants the annual amount paid to the museum to gro by 5% per year.  Given that the interest rate is 9%, how much does she need to fund this perpetuity?