The school district needs to pass a bond levy for funding to remodel existing schools and to build new schools. Expenditures for the new and remodeled buildings will begin two years after passage of the bond. If the school district receives all funding immediately after the passage of the bond and can invest the funds at a rate of 2.75% per year, how large must the bond be for the district to have $48,000,000 at the start of construction?
The school district needs to pass a bond levy for funding to remodel existing schools and to build new schools. Expenditures for the new and remodeled buildings will begin two years after passage of the bond. If the school district receives all funding immediately after the passage of the bond and can invest the funds at a rate of 2.75% per year, how large must the bond be for the district to have $48,000,000 at the start of construction?
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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Question
The school district needs to pass a bond levy for funding to remodel existing schools and to build new schools. Expenditures for the new and remodeled buildings will begin two years after passage of the bond. If the school district receives all funding immediately after the passage of the bond and can invest the funds at a rate of 2.75% per year, how large must the bond be for the district to have $48,000,000 at the start of construction?
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Please note; $45,383,919.96 is not correct
The options are:
$47,554,834
$45,465,040
$46,556,397
$48,000,000
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