Melissa agrees to contribute $500 to the alumni fund at the end of each year for the next 7 years. Shannon wants to match Melissa's gift, but he wants to make a lump-sum contribution. If the current interest rate is 2.5% compounded annually, how much should Shannon contribute to equal Melissa'sgift? (Round your answer to the nearest cent.)$

Contribution amount=$500Period (n)=7 years Rate of interest=r =2.5%=0.025 Present value=

Answered: ontribute $500 to the alumni fund at…

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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Similar questions

You donate $400,000 to provide annual scholarships in perpetuity. The money is deposited into an investment which pays 9% compounded monthly. What size annual scholarship can be awarded if the first scholarship will be awarded in one year?
Granny Gums has established a scholarship at the Martin College of Dentistry. She will make deposits into an endowment account that pays 12% per year based on the following schedule.If the first scholarship is to be awarded 1 year after the first deposit is made and thereafter the award will be given indefinitely, what is the scholarship amount?
You want to endow a scholarship that will pay $11,000-per year forever, starting one year from now. If the school's endowment discount rate is 9%, what amount must you donate to endow the scholarship? The amount you must donate is $_______. (Round to the nearest cent.)
Newman Hitchcock is 37 years old today and he wishes to accumulate $536,000 by his 60 th birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal deposits on his 37 th through his 59 th birthdays. What annual deposit must Newman make if the fund will earn 10% interest compounded annually? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) I put 65845.4009 but it says that isn't correct so I'm confused, I used my calculator and not the tables.
Mr Santos wants to get a lump sum of money when he retires at the end of 30 years. He then deposits a uniform amount every end of the year in a fund that gives an interest rate of “i” percent compounded annually. If the computed amount factor is equal to 43.7685, what is the value of “ ï"
I need the answer as soon as possible
The Pithybottoms want to make a donation to set up a scholarship trust fund at Hinose College. The fund is to support payments of $5,000 at the end of every three months in perpetuity. If the fund earns 7.5% compounded quarterly, how much must they donate?
Your grandfather wants to establish a scholarship in his father's name at a local university and has stipulated that you will administer it. As you've committed to fund a $15,000 scholarship every year beginning one year from tomorrow, you'll want to set aside the money for the scholarship immediately. At tomorrow's meeting with your grandfather and the bank's representative, you will need to deposit (rounded to the nearest whole dollar) so that you can fund the scholarship forever, assuming that the account will earn 4.50% per annum every year. Oops! The bank representative just reported that he misquoted the available interest rate on the scholarship's account. Your account should earn 7.00%. The amount of your required deposit should be revised to relationship between the interest rate earned on the account and the present value of the perpetuity. This suggests there is
A generous alum would like to establish an endowment that would sponsor a student organization's conferences in perpetuity. A one-time cost of $500,000 must be paid today to purchase supplies for the conference. The conference is held once every four years and costs $90,000 . The first conference will take place at the end of year 4 . The alum's gift is invested in an account that earns 4% annually. How much would the alum need to place in the endowment to be able to sponsor the student organization's conferences? [Enter your answer with no dollar sign or comma.]
Brenda Young desires to have $20,000 eight years from now for her daughter’s college fund. If she will earn 4 percent (compounded annually) on her money, what amount should she deposit now? Use the present value of a single amount calculation. Use Exhibit 1-C. (Round time value factor to 3 decimal places and final answer to nearest whole number.)
Miranda and Henry plan to send their son to a university. To pay for this they will contribute 11 equal yearly payments into an account in interest at the APR of 8.8% compounded annually. Six years after their last contribution they will begin the first of five yearly withdraws of $58, 000 to pay for the university bills. How large Messer yearly contributions be?
Q) A donor wishes to endow a scholarship to a certain university in the name of a certain professor. The scholarship is to provide $80,000 per year for first 10 years and $100,000 per year for the following 90 years. If the university expects to be able to earn 10% per year compounded continuously on the endowment, how much must the donor give now if the first scholarship is to be given 3 years from now? Solve it early but correctly. Handwriting or typed answer only not in excel work.

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