The trustees of a college have accepted a gift of $175,000, but are required to deposit it in an account paying 10% per year, compounded semiannually. They may make equal withdrawals at the end ofeach six-month period, but the money must last 7 years.(a) Find the amount of each withdrawal.(b) Find the amount of each withdrawal if the money must last 9 years.(a) The amount of each withdrawal is $(Round your answer to the nearest cent.)

Here, Amount DepositedToday $1,75,000.00Interest Rate10%Compounding Period (Semi Annual)2Withdrawal…

Answered: The trustees of a college have accepted…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 24P

See similar textbooks

Similar questions

Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2 withdrawals: 40,000 at the end of 4 years and 50,000 at the end of 10 years. Analyze the problem to determine the required deposit, stating the procedure to follow and the tables to use in developing the solution.
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
K The trustees of a college have accepted a gift of $100,000, but are required to deposit it in an account paying 8% per year, compounded semiannually. They may make equal withdrawals at the end of each six-month period, but the money must last 4 years. Find the amount of each withdrawal. The amount of each (Round your answer
The trustees of a college have accepted a gift of $100000, but are required to deposit it in an account paying 8% per year, compounded semiannually. They may make equal withdrawals at the end of each six-month period, but the money must last 4 years. a. Find the amount of each withdrawal. b. Find the amount of each withdrawal if the money must last 7 years.
A foundation announces that it will be offering one CUHK (SZ) scholarship every year for an indefinite number of years. The first scholarship is to be offered exactly one year from now. When the scholarship is offered, the student will receive ￥100,000 annually for a period of four years, beginning from the date the scholarship is offered. This student is then expected to repay the principal amount received (￥400,000) in 10 equal annual installments, interest-free, starting two years after the last payment of the scholarship. This implies that the foundation is really giving an interest-free loan under the guise of a scholarship. The current interest is 6% and is expected to remain unchanged. (1) What is the PV of the first scholarship? (2) The foundation invests a lump sum to fund all future scholarships. Determine the size of the investment today
Explain the Step By Step Process. An engineer wishes to set up a special fund by making uniform semiannual and end-of-period deposits for 20 years. The fund is to provide P100,000 at the end of each of the last five years of the 20-year period. If interest is 8% compounded semiannually, what is the required semiannual deposit to be made? ANS: P6,193.39
Clearlake Optical has a $50,000 note that comes due in 6 years. The owners wish to create a sinking fund to pay this note. If the fund earns 2.5% compounded semiannually, how much must each semiannual deposit be? (Round your answer to the nearest cent.)$
A church congregation has raised $37,625 for future outreach work. If the money is invested in a fund paying 7% compounded quarterly, what annual payment can be made for ten years from the fund if the first payment is to be made four years from the date of investment in the fund? The size of the payment is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
1. At the conclusion of each year, each participant made a deposit of 1500.35 into a sinking fund. What was the principal in the fund immediately after the seventh deposit was made if the fund generated interest at a rate of 6.02% per year compounded quarterly? 2. For ten years, a man inherited a 100,000 endowment every three months. He may, however, elect to receive a single lump sum payout at the end of the four-year period. If the cost of money is 14.06 percent compounded quarterly, how much is this lump sum?
A college wants to provide students with a perpetual scholarship of $10,000 at the end of every 3 months. How large should their endowment fund be if invested at X% (choose the rate) compounded quarterly?
Ted Houser wishes to accumulate a fund of $40,000 for the purchase of a house and lot. He plans to deposit $4,000 semiannually at the end of each 6 months. Assuming interest at 14% a year compounded semiannually, how many deposits of $4,000 each will be required, and what is the amount of the last deposit?
A wealthy donor wants to establish a scholarship that pays an award of $1,000 in perpetuity at the end of each year. The first award will be in three years. How much money must she set aside today in order to fund the bursary? Assume that the money will earn a nominal interest rate of 4% compounded annually.

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS