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?
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).