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Homework: HW 5 Chapter 6 Question 5, P8-33 (algor... HW Score 7.00%, 6 of 85 points Part 1 of 4 O Points: 0 of 12

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Homework: HW 5 Chapter 6 Question 5, P8-33 (algor... HW Score 7.00%, 6 of 85 points Part 1 of 4 O Points: 0 of 12 Save (Comprehensive problem) Over the past few years, Microsoft founder Ba Gatos net worth has fuctuated between $20 billion and $130 milion Iheany 2006, it was out 23 billion he reduced hastake in Microsoft from 21 percent to around 14 percent by moving billion into a charitable foundation Lets see what Bal Gates can do with his money in the following protin a Manhattan's native tribe sold Manhattan Island to Peter Minut for $24 in 1626. Now. 387 years later in 2013, B Gates wants to buy the island from the current rative" How much would Bill have to pay for Manhattan if the current natives want a 5 percent annual return on the orginal $24 purchase price? b. Bill Gates decides to pass on Manhattan and instead plans to buy the sky of Seatte Washington, for $70 billion in 10 years. How much would Bill have to invest today at percent compounded analysorder to purchase Seattie in 10 years? c. Now assume Bill Gates only wants to invest hat his net worth today, $13 billion, in order to buy Sastle for $70 billion in 10 years. What annual rate of selon would be have beam lan order to comcete bis purchase in 10 years? d. Instead of buying and running large cities, Bl Gates is considering quitting the rigors of the business world and ratining to work on he got game. To fund his retirement. Dit would invest is $20 billion fortone in safo investments with an expected annual rate of retum of 7 percent. He also wants to make 45 equal annual withdrawals from this retirement fund beginning a year from today furning harorament fund to $0 = the end of 45 years. How much can his annual withdrawal be in this case? .. The amount bill would have to pay for Manhattan if the current atves wanted a 5 percent un rotum on the original $24 purchase price after 38 years Chion (Round to two dechat places

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