Time remaining:
Present Value of an Ordinary Annuity of 1

label Accounting
account_circle Unassigned
schedule 0 Hours
account_balance_wallet $5

Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually.Instead of investing the entire $1,000,000, Bogut invests $300,000 today and plans to make 9 equal annual investments into the fund beginning one year from today. What amount should the payments be if Bogut plans to establish the $1,999,000 foundation at the end of 9 years?
Mar 8th, 2015

a) 11 years. See the table in your text or use the this online calculator: 
http://www.calculatorsoup.com/calculator...

b) $140,556.80. First computing the value of $300,000 at end of year 9 at 6% = $506,844 (using the above online calculator). The remainder of $1,391,156 to be made in 9 installments with deposits made at the end of each year (by trial & error using the above online calculator).

Mar 8th, 2015

Incorrect

Mar 8th, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Mar 8th, 2015
...
Mar 8th, 2015
Oct 20th, 2017
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer