2 (a) A scholarship is set up that makes two payments a year The first payment is $750 and the second payment, made exactly 6 months later, is $1500 This payment scheme continues forever If money can be invested at ji 9 , how much money is needed to fund this scholarship six months before the first payment is to be made (4 marks) (b) Another university sets up two scholarship funds The first one pays out $1200 a year, starting one year from now The second one pays out $100 in the first year, $200 in the second year, $300 in the third year, and so on At what interest rate would the present value of the two scholarships be the same (For BONUS marks At what interest rate would the difference between the present value of the two scholarship funds be maximized ) (4 marks bonus question 2 marks) 2 (a) A scholarship is set up that makes two payments a year The first payment is $750 and the second payment, made exactly 6 months later, is $1500 This payment scheme continues forever If money can be invested at ji 9 , how much money is needed to fund this scholarship six months before the first payment is to be made (4 marks) (b) Another university sets up two scholarship funds The first one pays out $1200 a year, starting one year from now The second one pays out $100 in the first year, $200 in the second year, $300 in the third year, and so on At what interest rate would the present value of the two scholarships be the same (For BONUS marks At what interest rate would the difference between the present value of the two scholarship funds be maximized ) (4 marks bonus question 2 marks)

Question

2  (a) A scholarship is set up that makes two payments a year  The first payment is $750 and the second payment, made exactly 6 months later, is $1500  This payment scheme continues forever  If money can be invested at ji   9 , how much money is needed to fund this scholarship six months before the first payment is to be made  (4 marks) (b) Another university sets up two scholarship funds  The first one pays out $1200 a year, starting one year from now  The second one pays out $100 in the first year, $200 in the second year, $300 in the third year, and so on  At what interest rate would the present value of the two scholarships be the same  (For BONUS marks  At what interest rate would the difference between the present value of the two scholarship funds be maximized ) (4 marks  bonus question   2 marks) 2  (a) A scholarship is set up that makes two payments a year  The first payment is $750 and the second payment, made exactly 6 months later, is $1500  This payment scheme continues forever  If money can be invested at ji   9 , how much money is needed to fund this scholarship six months before the first payment is to be made  (4 marks) (b) Another university sets up two scholarship funds  The first one pays out $1200 a year, starting one year from now  The second one pays out $100 in the first year, $200 in the second year, $300 in the third year, and so on  At what interest rate would the present value of the two scholarships be the same  (For BONUS marks  At what interest rate would the difference between the present value of the two scholarship funds be maximized ) (4 marks  bonus question   2 marks)

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Question

2. (a) A scholarship is set up that makes two payments a year. The first payment is $750 and the second payment, made exactly 6

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