You have just received an endowment and placed this money in a savings account at an...

You have just received an endowment and placed this money in a savings account at an annual rate of 13.58 percent. You are going to withdraw the following cash flows for the next five years.

End of year
1.   $7,512
2.   $8,140
3.   $4,455
4.   $3,122
5.   $1,857

How much is the endowment that you received?

Round the answer to two decimal places.

Expert Solution

rate positively ..

We have to compute the present vlaue of the annual cash flow
	i	ii	iii=i*ii
year	Cash flow	PVIF @ 13.58%	Present value
1	7512	0.880437	$ 6,613.84
2	8140	0.775169	$ 6,309.87
3	4455	0.682487	$ 3,040.48
4	3122	0.600887	$ 1,875.97
5	1857	0.529043	$ 982.43
Present value =		$ 18,822.59

Ans =			$ 18,822.59

jeff jeffy answered 2 years ago

You have invested money in a savings account that pays a fixed monthly interest on the...

You have invested money in a savings account that pays a fixed monthly interest on the account balance. The following table shows the account balance over the first 5 months. Time in months Savings balance 0 $1500.00 1 $1521.00 2 $1542.29 3 $1563.88 4 $1585.77 5 $1607.97 (a) How much money was originally invested? $ (b) Show that the data are exponential. (Round your answer to three decimal places.) Each successive ratio of new/old is , which shows that the data...

Endowment and Related Funds Jefferson Hospital received money from a donor to set up an endowment...

Endowment and Related Funds Jefferson Hospital received money from a donor to set up an endowment fund. The following information pertains to this contribution: During 2012 $2,000,000 was received to establish the fund. The requirements were (a) $100,000 of the endowment fund"s income must be used for research grants each year. (b) The remainder of income is under the discretion of the governing board. (c) The principal is expendable after the donor"s death. It shall be used to purchase equipment....

You have just started a new job that offers a retirement savings account. You have two...

You have just started a new job that offers a retirement savings account. You have two options: You can invest 5% of your monthly wages at 2% OR You can invest 4% of your monthly wages at 4%. Both are compounded monthly. b. Assume that you will always make $45,000 annually, how much will you have saved with the better plan after 15 years? c.Assume that you will always make $45,000 annually, how much will you have saved with the...

You wish to buy a car worth $20,000. You have the money in your savings account....

You wish to buy a car worth $20,000. You have the money in your savings account. Should you go ahead and pay cash for the car (out of your savings account) or should you get a car loan from the dealer or from your bank to pay for the car? How do your expectations about interest rates have an impact on your decision? Please give an explanation.

Suppose you have a certain amount of money in a savings account that earns compound monthly...

Suppose you have a certain amount of money in a savings account that earns compound monthly interest, and you want to calculate the amount that you will have after a specific number of months. The formula is as follows: f = p * (1 + i)^t • f is the future value of the account after the specified time period. • p is the present value of the account. • i is the monthly interest rate. • t is the...

You have just inherited $100,000 tax free. You have three options. Invest in a savings account...

You have just inherited $100,000 tax free. You have three options. Invest in a savings account at your local bank at 1% annual return. Invest the the S&P 500 with an anticipated return of 12% annual return, though there is always some risk as the past is not always an indication of the future.. Invest in your business with an anticipated return of 24%, but with moderate risk due to the changing business environment. Which option would you pursue and...

A financial institution offers a "double-your-money" savings account in which you will have $2 in 11...

A financial institution offers a "double-your-money" savings account in which you will have $2 in 11 years for every dollar you invest today. What stated annual interest rate (assuming monthly compounding) does this account offer? Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).

You received a high-yield savings account that contains $1,000,000. The account has a 7% annual interest...

You received a high-yield savings account that contains $1,000,000. The account has a 7% annual interest rate and you want to take out a constant amount every year for 40 years. 1. How much would you be able to withdraw every year? Hint: the annual interest rate should be used as the discount rate in the finite time annuity formula. 2. Using Microsoft Excel, decompose your annual withdrawals into interest revenue and revenue earned from principal deduction (for example, at...

1) Please explain the following terms: savings account, basic savings account, interest bearing checking account, money...

1) Please explain the following terms: savings account, basic savings account, interest bearing checking account, money market deposit accounts, and certificate of deposits 2) What is the difference between a bond and a certificate deposit

In the USA, a Flexible Savings Account (FSA) plan allows you to put money into an...

In the USA, a Flexible Savings Account (FSA) plan allows you to put money into an account at the beginning of the calendar year that can be used for medical expenses. This amount is not subject to federal tax. As you pay medical expenses during the year, you are reimbursed by the administrator of the FSA until the money is exhausted. From that point on, you must pay your medical expenses out of your own pocket. On the other hand,...

Question