Question

How much will a person have to invest in a savings account that pays interest from the 30% capitalizable monthly to be able to withdraw $ 25,000 monthly for three years?

Indicate which series of uniform payments will be equivalent to each of the following values:

A) $ 1,600,000 in eight years, annual payments and a quarterly interest rate of 8%.

B) $ 3,100,000 in five years, semi-annual payments and an annual interest rate of 33%.

C) $ 1,500,000 today, monthly payments for one year and a semiannual 15% interest rate.

In a university there is an habit that every semester promotion makes a donation for $ 500,000 ten years after graduation. This custom began in June of 1978 with the group that ended in June 1968. If the university invests these donations semi-annual in a financial institution that pays an annual interest of 34%, how much will the university pay for these donations in December 1993?

Answer 1

1)		Monthly withdrawals		25000
		No. of months		36
		Monthly interest		2.50%	(30%/12)
		Investment required		588906.28	PV(2.5%,36,25000,,)
2)	A)	Annual interest rate		32%
		Annual payments		62309.55	PMT(32%,8,0,1600000,)
	B)	Semi Annual payments		141873.91	PMT(33%/2,10,0,3100000,)
	C)	Monthly payments		146230.69	PMT(15%/6,12,1500000,,)
3)		No. of donations		(1993-1978)*2		30
		Worth of these donations				323719558.85		FV(34%/2,30,-500000,,)