Question
In 1992 a research foundation was established by a fund of $250 000 invested at a rate that would provide $30 000 payments at the
In 1992 a research foundation was established by a fund of $250 000 invested at a rate that would provide $30 000 payments at the end of each year, forever.
(a) What interest rate was being earned on the fund?
(B) After the payment in 1997, the foundation learned that the rate of interest earned on the fund was being changed to j1 = 9%. If the foundation wants to continue annual payments forever, what size will the new payments be?
(c) If, instead, the foundation continues with : the $30 000 payments annually, how many full payments can be made at the new interest rate?
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