Melissa agrees to contribute $500 to the alumni fund at the end of each year for the next 7 years. Shannon wants to match Melissa's gift, but he wants to make a lump-sum contribution. If the current interest rate is 2.5% compounded annually, how much should Shannon contribute to equal Melissa'sgift? (Round your answer to the nearest cent.)$

Contribution amount=$500Period (n)=7 years Rate of interest=r =2.5%=0.025 Present value=

Answered: ontribute $500 to the alumni fund at…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 15E

See similar textbooks

Similar questions

Melissa agrees to contribute $500 to the alumni fund at the end of each year for the next 6 years. Shannon wants to match Melissa's gift, but he wants to make a lump-sum contribution. If the current interest rate is 3.5% compounded annually, how much should Shannon contribute to equal Melissa's gift? (Round your answer to the nearest cent.)$
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.
Grandparents plan to open an account on their grandchild's birthday and contribute each month until she goes to college. How much must they contribute at the beginning of each month in an investment that pays 7%, compounded monthly, if they want the balance to be $200,000 at the end of 18 years? (a) State whether the problem relates to an ordinary annuity or an annuity due. ordinary annuity annuity due (b) Solve the problem. (Round your answer to the nearest cent.)
Ann and Tom want to establish a fund for their grandson's college education. What lump sum must they deposit at a 7% annual interest rate, compounded monthly, in order to have $30,000 in the fund at the end of 15 years?
Grandparents plan to open an account on their grandchild's birthday and contribute each month until she goes to college. How much must they contribute at the beginning of each month in an investment that pays 7%, compounded monthly, if they want the balance to be $170,000 at the end of 18 years? (a) State whether the problem relates to an ordinary annuity or an annuity due. (b) Solve the problem. (Round your answer to the nearest cent.)
Kori and Ben plan to send their son to university. To pay for this they will contribute 9 equal yearly payments to an account bearing interest at the APR of 2.1%, compounded annually. Six years after their last contribution, they will begin the first of five, yearly, withdrawals of $33,600 to pay the university's bills. How large must their yearly contributions be?
Emily Bennett is setting up an annuity for a memorial scholarship. What lump sum does she need to set aside today at 7% annual interest to have the scholarship pay $ 30,000annually for 10 years?
Parvati wants to donate enough money to Camosun College to fund an ongoing annual bursary of $2,750 to a deserving finance student. How much must she donate today in order for the first payment to to be given out in one year? Assume an interest rate of j2=4%.
Madison and Colton plan to send their son to university. To pay for this they will contribute 12 equal yearly payments to an account bearing interest at the APR of 4.9%, compounded annually. Six years after their last contribution, they will begin the first of five, yearly, withdrawals of $34,000 to pay the university's bills. How large must their yearly contributions be? Answer = $ (Round %3D to the nearest cent/penny.)
Ann and Tom want to establish a fund for their grandson's college education. What lump sum must they deposit at a 7% annual interest rate, compounded monthly, in order to have $40,000 in the fund at the end of 15 years?
Brooke and Collin plan to send their son to university. To pay for this they will contribute 10 equal yearly payments to an account bearing interest at the APR of 6.4%, compounded annually. Four years after their last contribution, they will begin the first of five, yearly, withdrawals of $51,300 to pay the university's bills. How large must their yearly contributions be? Submit Question
Delia purchases an annuity that will pay her $10,000 per year for the next 10 years starting next year. Assuming a rate of 6%, what is the value of the annuity. Choose the closest. a) $106,000 b) $131,808 c) $159,374 d) $171,569

SEE MORE QUESTIONS

Recommended textbooks for you

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Excel Applications for Accounting Principles

Accounting

ISBN:

9781111581565

Author:

Gaylord N. Smith

Publisher:

Cengage Learning

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS