What amount of money invested today at 15% interest can provide the following scholarships: 30 000 at the end of each year for 6 years, 40 000 for the next 6 years and 50 000 thereafter?

Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance
Section: Chapter Questions
Problem 13PAE
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Solve the problem using the given formula:
FUTURE
F = A
A = F
[(1 + i)" -
A = P
PRESENT
P = A
i
t
|(1 + i)*
1]
1- (1 + i)¹¹]
t
[1-(1 + i)"]
ANNUITY DUE
P=A
[(1+)-1-1]
F=A
i(1+1)-1
[(1+1)+¹-1
Po=A
P =
DEFFERED ANNUITY
[1+(1+i)"]
PERPETUITY
+A
-A
(1+i)n
What amount of money invested today at 15% interest can provide the following scholarships:
P 30 000 at the end of each year for 6 years, 40 000 for the next 6 years and 50 000 thereafter?
Transcribed Image Text:Solve the problem using the given formula: FUTURE F = A A = F [(1 + i)" - A = P PRESENT P = A i t |(1 + i)* 1] 1- (1 + i)¹¹] t [1-(1 + i)"] ANNUITY DUE P=A [(1+)-1-1] F=A i(1+1)-1 [(1+1)+¹-1 Po=A P = DEFFERED ANNUITY [1+(1+i)"] PERPETUITY +A -A (1+i)n What amount of money invested today at 15% interest can provide the following scholarships: P 30 000 at the end of each year for 6 years, 40 000 for the next 6 years and 50 000 thereafter?
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