Question: A company sets up a perpetuity to pay for office supplies. If the perpetuity earns 2.5% compounded quarterly and there is initially $244,749, how much

A company sets up a perpetuity to pay for office supplies. If the perpetuity earns 2.5% compounded quarterly and there is initially $244,749, how much can they spend at the end of each quarter on supplies?

  1. Your boss wants to set up an account that will be used to pay the bonuses of employees at the end of each year (assume this will continue perpetually). The bonuses sum to $10,358 and the account can earn 2% compounded annually. How much needs to be in the account when it is set up?

  2. A loan of $734 is to be paid off, but payments will not be able to commence until one year from now. At that time, payments will begin immediately and be paid off with 6 monthly payments. If interest is accrued at 6% compounded monthly, how much are the payments?

  3. Every month, you will be depositing $100 into an account for a year starting today. If you ended up having $1300 after the 12 deposits, what periodic interest rate was earned? Write your answer as a percentage rounded to 3 decimal places.


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