Question

A permanent fund for supporting research has been created. The donor plans to give the equivalent...

A permanent fund for supporting research has been created. The donor plans to give the equivalent amount of money now so that $100,000 per year can be withdrawn each year forever, beginning in year 6. If the fund earns interest at a rate of 8% per year, how much money must be donated now?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Starr Company decides to establish a fund that it will use 1 year from now to...
Starr Company decides to establish a fund that it will use 1 year from now to replace an aging production facility. The company will make a $94,000 initial contribution to the fund and plans to make quarterly contributions of $50,000 beginning in three months. The fund earns 4%, compounded quarterly. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "Table Factor" to 4 decimal places and final...
How much must you deposit each year into your retirement account starting now and continuing through...
How much must you deposit each year into your retirement account starting now and continuing through year 10 if you want to be able to withdraw $90,000 per year forever, beginning 32 years from now? Assume the account earns interest at 12% per year. The amount to be deposited is determined to be $
How much must you deposit each year into your retirement account starting now and continuing through...
How much must you deposit each year into your retirement account starting now and continuing through year 15 if you want to be able to withdraw $90,000 per year forever, beginning 26 years from now? Assume the account earns interest at 10% per year. The amount to be deposited is determined to be
How much must you deposit each year into your retirement account starting now and continuing through...
How much must you deposit each year into your retirement account starting now and continuing through year 15 if you want to be able to withdraw $95,000 per year forever, beginning 31 years from now? Assume the account earns interest at 11% per year. The amount to be deposited is determined to be $_________ .
Ahmad Abu Al-Hawa plans to retire 40 years from now. He expects that he will live...
Ahmad Abu Al-Hawa plans to retire 40 years from now. He expects that he will live 30 years after his retirement. He wants to have enough money upon reaching retirement age to be able to withdraw $180,000 from his account at the end of each year he expects to live. Ahmad plans to accumulate the retirement fund by making an equal deposit at the of each year for the next 40 years. The interest rate is expected to be 12%...
9. An employee plans to invest $40,000 per year in a retirement fund at the beginning...
9. An employee plans to invest $40,000 per year in a retirement fund at the beginning of each of the next 12 years. The employee believes she will earn 12% on her investments in each of the first 4 years, 9% in each of the next 4 years, and 6% in each of the final 4 years before she retires. a. How much money will the employee have in the retirement fund when she retires? b. What would be the...
Mark is planning to retire in 30 years. he wishes to make monthly deposits in a...
Mark is planning to retire in 30 years. he wishes to make monthly deposits in a retirement fund until he retires so that, beginning one-year following his retirement, he will receive annual payments of $100,000 for the next 25 years. The interest rate is 10% compounded daily. Assume 30 days per month and 365 days per year. a. What is the effective monthly interest rate? b. What is the effective annual interest rate? c. How much money must he have...
TIME VALUE OF MONEY Assume you put $5,000 into an investment fund today that will pay...
TIME VALUE OF MONEY Assume you put $5,000 into an investment fund today that will pay 4% compounded annually for 10 years. What will the fund be worth in 10 years? How much of this is interest?   2. It is the beginning of 20Y1 and it’s time to renew your security alarm service! The alarm company offers two plans for three years of coverage. Under the first plan, $1,000 annual payments are due at the end of 20Y1, 20Y2, and...
1. Chris Spear invested $50,000 today in a fund that earns 8% compounded semiannually. To what...
1. Chris Spear invested $50,000 today in a fund that earns 8% compounded semiannually. To what amount will the investment grow in 3 years? 2. Sally Medavoy will invest $10,000 a year for 3 years in a fund that will earn 6% annual interest. If the first payment into the fund occurs today, what amount will be in the fund in 3 years? 3. John Fillmore's lifelong dream is to own his own fishing boat to use in his retirement....
Mr. Rich E. Creasis, an elderly alumni of SU, has been thinking about establishing a trust...
Mr. Rich E. Creasis, an elderly alumni of SU, has been thinking about establishing a trust fund for his           granddaughter’s SU tuition. He plans to make equal, annual payments, a year from today, into an account           that will yield 4 percent per year. If he makes eight payments, how much will each have to be so that his           granddaughter will have $40,000 to begin her SU studies in eight years? [Hint: Is this an end of period...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT