Kate Rose 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 $2,500 annually for 10 years?
Kate Rose 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 $2,500 annually for 10 years?
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 22E
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Question
Transcribed Image Text:Present Value of a $1.00 Ordinary Annuity
Rate per period
Periods 2%
3%
4%
5%
6%
7%
8%
9%
10%
1
0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909
2
1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736
3
2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487
4
3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170
4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791
6.
5.601 5.417 5.242 5.076 4.917 4.767 4.623 4.486 4.355
7
6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868
8.
7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335
8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759
10
8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145
11
9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495
Transcribed Image Text:Kate Rose 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
$2,500 annually for 10 years?
| Click the icon to view the table.
Today she needs to set aside S.
(Round to the nearest cent as needed.)
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