Question

In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the required payment for the sinking fund. (Round your answer to the nearest cent.)

Yearly deposits earning 12.9% to accumulate $2500 after 12 years. The Oseola McCarty Scholarship Fund at the University of Southern Mississippi was established by a $150,000 gift from an 87-year-old woman who had dropped out of sixth grade and worked for most of her life as a washerwoman. How much would she have had to save each week in a bank account earning 3.9% compounded weekly to have $150,000 after 75 years? (Round your answer to the nearest cent.)

Answer 1

	Rate	Annual Interest Rate	12.90%
	Nper	Number of years	12
	Fv	Amount to be accumulated	$2,500
	PMT	Yearly deposit required	$98.06	(Using PMT function of excel with Rate=12.9%, Nper=12, Fv=-2500)
		Weekly interest rate=(3.9/52)%	0.075%
	Rate	Weekly interest rate	0.075%
	Nper	Number of weeks	3900	(75years*52)
	Fv	Amount to be accumulated	$150,000
	PMT	Yearly deposit required	$6.39	(Using PMT function of excel with Rate=0.075%, Nper=3900, Fv=-150000)