Author Question: A generous philanthropist plans to make a one-time endowment to a renowned heart research center ... (Read 66 times)

saliriagwu

  • Hero Member
  • *****
  • Posts: 537
A generous philanthropist plans to make a one-time endowment to a renowned heart research center which would provide the facility with 250,000 per year into perpetuity. The rate of interest is expected to be 8 percent for all future time periods.
 
  How large must the endowment be?
  A) 2,314,814
  B) 2,000,000
  C) 3,125,000
  D) 3,000,000

Question 2

You can deposit your savings at the Darlington National Bank, which offers to pay 12.6 percent interest compounded monthly, or at the Barlett Bank, which will pay interest of 11.5 percent compounded daily. (Assume 365 days in a year.
 
  ) Which bank offers the higher effective annual rate?
  A) Darlington National Bank
  B) Barlett Bank
  C) Both banks offer the same effective rate.
  D) Cannot be determined from the information provided.
  E) Workable only if the banks use the same compounding period.



javimendoza7

  • Sr. Member
  • ****
  • Posts: 293
Answer to Question 1

C

Answer to Question 2

A



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The Romans did not use numerals to indicate fractions but instead used words to indicate parts of a whole.

Did you know?

Your skin wrinkles if you stay in the bathtub a long time because the outermost layer of skin (which consists of dead keratin) swells when it absorbs water. It is tightly attached to the skin below it, so it compensates for the increased area by wrinkling. This happens to the hands and feet because they have the thickest layer of dead keratin cells.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

Did you know?

The human body's pharmacokinetics are quite varied. Our hair holds onto drugs longer than our urine, blood, or saliva. For example, alcohol can be detected in the hair for up to 90 days after it was consumed. The same is true for marijuana, cocaine, ecstasy, heroin, methamphetamine, and nicotine.

Did you know?

IgA antibodies protect body surfaces exposed to outside foreign substances. IgG antibodies are found in all body fluids. IgM antibodies are the first type of antibody made in response to an infection. IgE antibody levels are often high in people with allergies. IgD antibodies are found in tissues lining the abdomen and chest.

For a complete list of videos, visit our video library