Red Deer College wants to set up a scholarship for students in its business programs such that at the end of every year it could distribute a total of $50,000. If the perpetuity fund can earn 4.85% compounded semi- annually, how much money will need to be raised to fund the scholarship?
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- You have $500,000 to donate to your college. The college's discount rate is 7%. You donate the money today, but you ask the college to delay the scholarship payment so that the first scholarship payment is made 10 years from today. How large will the annual payment be? The annual scholarship payment will be $ (Round to the nearest cent.)[College: Project Cost-Benefit Analysis Course, Economic Questions] - Can someone please explain the steps on how to complete these problems? Thank you in advance! Find the equivalent cash cost today for a car purchased for $1000 down and $500 a month for 36 months, if money is worth 12% per year compounded monthly. A person deposits $1100 at the end of the year for 20 years, and then withdraws an amount at the end of each year for the next 5 years. If money is worth 6% per year, and the same amount is withdrawn each year, what is the amount of each withdrawal? A person invests $1000 per year in a fund, for 10 years, and then stops making payments. If money is worth 8% per year, what is the value in the fund at the end of 20 years?A state lotto has a prize that pays $600 each week for 30 years.Find the total value of the prize: $ 936000 If the state can earn 6% interest on investments, how much money will they need to put into an account now to cover the weekly prize payments?
- HR wants to offer a Country Club membership for a group of employees that will cost the company $10,000 dollars a year. They will begin annually starting one year from now. 1. What amount must be invested today at 8.0% compounded annually to fund the scholarship program in perpetuity? 2. Given the current economic climate the CEO has lowered the initial investment amount you had available to $100,000, how much do you now have for the Country Club membership program?Say that you want to establish a scholarship fund that will make fixed payments forever. To fund the scholarship, you plan to make 12 annual contributions of $9.9k to an investment account with an expected return of 6.0% interest annually. Your first contribution occurs today. If the scholarship fund makes its first payment two years following the last contribution, then what is the fixed annual payment that the scholarship fund will award? (Round to the nearest dollar)1. (From section 6.1) SouthWestern airlines sets up a sinking fund so that they will have $75,500 to pay for a replacement piece of equipment in 15 years when the current equipment will be sold for scrap. If they make deposits into the account at the beginning of every 3 months for 15 years, and the investment account pays 4.4% interest compounded every 3 months, what will the quarterly deposit be to reach their goal? (a) Which formula will you use? Circle one. Annuity Payout-Annuity (b) What are the following variables that we will need for the formula? PMT = n = t = A or Po = r = (c) Write the formula you will use with the numbers plugged in below. (d) Solve using your calculator or technology and round to two decimal places. Work is not required here. Write the answer here and state which variable you solved for. (e) Using your own words, describe what you found by solving the equation in terms of the word problem given.
- Castillo’s Warehouse will need to purchase a new forklift for its warehouse operations three years from now, when its new warehouse facility becomes operational. If the price of the new forklift is $38,000 and Castillo's can invest its money at 7.25% compounded monthly, how much should it put aside today to achieve its goal?2. You plan to purchase an office space in Chamblee's Chinatown for $50,000 at the end of year 2021. You estimate that by renting out that office space, you will receive a stream of rental income for the coming eight years at the end of each year as shown in below. After eight years, you estimate that you can still sell the office space for $45,000 at the end of the eighth year. Is this project a good investment if you project that the normal rate of return in this line of business is 12%? How about if the general rate of return is 15% ? 8%? Year 1 $6,000 Year 5 $7,500 Year 2 $6,500 Year 6 $8,500 Year 3 $7,000 Year 7 $8,500 Year 4 $7,500 Year 8 $8,500 3. Based on the information provided in Step 2 above, compute the Internal Rate of Return for the investment. 4. While you were waiting for your first job interview results to come, you spent several dollars to buy a Georgia Educational Lotto and were lucky enough to win a $1 million prize. The prize is to be awarded in 20 annual payments…what is the cost of the new animal shelter? Shuler Dog Care Co. wants to finance a new animal shelter by making eight annual deposits into a fund earning 6% compounded annually. The first four deposits are to be $24,000 each and will be paid at the beginning of the next four years. The last four deposits are to be $35,000 each and will be paid at the beginning of the last four years.
- A local Dunkin’ Donuts franchise must buy a new piece of equipment in 4 years that will cost $81,000. The company is setting up a sinking fund to finance the purchase. What will the quarterly deposit be if the fund earns 16% interest?Aetna is offering customers who invest $10,000 with them today a payment of $1,500 every 1.5 years in perpetuity. If the first payment will be made 1.5 years from today, what is the effective annual rate (EAR) of this investment opportunity?Warren buffet decides to endow an annual investment symposium at DePaul starting next year and continuing forever. The symposium is expected to cost $15000 at that time. Interest rates at 5% how much must he contribute today
