You would like to establish a trust fund that would provide annual scholarships of $100,000 today and then grow at 2.0% forever (i.e. at time 1 there will be a $102,000 scholarship award). How much would you have to deposit today in one lump sum to achieve this goal if you can earn a guaranteed 7.0 percent rate of return? 2,140,000 2,355,556
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- An endowment fund is set up today. It provides payments of $1500 a year for 6- years (first payment one year from now) followed by $2000 a year thereafter forever. If the interest rate is j1 = 6%, how much is needed to be deposited (invested) today? (Answer to nearest dollar.You want to start a scholarship fund at your alma mater with giving one $10,000 scholarship annually beginning one year from now. And you have at most $150,000 to start the fund. You also want the scholarship to be given out indefinitely. Assuming an annual interest rate of 8% (compounded continuously , do you have enough money for the scholarship fund? 15%4 (Hint: 1. Derive the formula of the present value of a perpetuity .2. Find the present value.)You would like to provide $145,000 a year forever for your heirs. How much money must you deposit today to fund this goal if you can earn a guaranteed 5.8 percent rate of return?
- You want to endow a scholarship that will pay $ 8 comma 000$8,000 per year forever, starting one year from now. If the school's endowment discount rate is 4 %4%, what amount must you donate to endow the scholarship? How would your answer change if you endow it now, but it makes the first award to a student 10 years from today?? You would like to have enough money saved to receive a $53,000 per year perpetuity after retirement. How much would you need to have saved in your retirement fund to achieve this goal? Assume that the perpetuity payments start on the day of your retirement. The annual interest rate is 8 percent. O -00 Multiple Choice $715,500 $1,060,000 $530,000Now consider your financial objective is to save $500,000 for preparing your retirement, assuming 30 years from now. If you invest your RRSP savings in a mutual fund which can realize an average return of 10% per year. To achieve your goal, how much do you need to save at the end of each year over the 30-year period? a. 4,039.26 b. 3,039.62 c. 2,985.54 d. 10,988.32 What is the FV of $100 deposited today into an account with an APR 12.6%, compounded semiannually for 10 years? a. 1478.96 b. 3460.06 c. 327.63 d. 339.36 A car dealer offers payment of $525.32 per months for 60 months on a $30,000 car after making a $5000 down payment. What's the loan's APR? a. 10.4798% b. 9.5224% c. 1.9609% d. 0.7935%
- You want to endow a scholarship now that will pay $7,000 per year forever, starting the first award 10 years from now. If the school's endowment discount rate is 6%, what amount must you donate today to endow the scholarship? The amount you must donate today to endow the scholarship is $ (Round to the nearest cent.)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 10%, what amount must you donate to endow the scholarship? The amount you must donate is $ (Round to the nearest cent.)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)
- You want to endow a scholarship that will pay $10,000 per year forever, starting one year from now. If the school's endowment discount rate is 7%, what amount must you donate to endow the scholarship? How would your answer change if you endow it now, but it makes the first award to a student 10 years from today? In the first case, the amount you must donate today is $ . (Round to the nearest cent.) How would your answer change if you endow it now, but it makes the first award to a student 10 years from today? In this case, the amount you must donate today is $. (Round to the nearest cent.)You would like to provide $113,000 a year forever for your heirs. How much money must you deposit today to fund this goal if you can earn a guaranteed 8.2 percent rate of return? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)What sum of money must be deposited in a trust fund to provide a scholarship of $1550, quarterly for infinite period, if interest is 7.2% compounded quarterly? (Money should be rounded to 2 decimal place) USE ONLY CALCULATOR TO CALCULATE YOUR ANSWERS. PMT VY CAY 1 PV 1550 0.072 4 0.018 86111.11 4