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please show steps ,thanksss (a) Kenneth has $1,000,000 in his investment account now i.e. Year 0). He has decided to save $100,000 at the end
please show steps ,thanksss
(a) Kenneth has $1,000,000 in his investment account now i.e. Year 0). He has decided to save $100,000 at the end of Year 1, $103,000 at the end of Year 2, $106,090 at the end of Year 3, and so on (i.e. increasing by around 3% cach year) until the end of year (20+2). What is the total amount that Kenneth will have accumulated at the end of year (20 +2) assuming that the annual rate of return is 10%? (Round up your final answer to thousand dollars.) (8 marks) (b) ABC Company, a large hi-tech company, has recently set up a scholarship for university students that have won their innovation project competition organized at the end of each year. With an estimated amount of $100,000 for the first year, they planned to step up the scholarship with uniform increases to a total of $1,000,000 by the end of year (10+2). (i) What is the value of the gradient for the growing scholarship? (Correct your final answer to 2 decimal places.) (3 marks) (ii) Given the discount rate is 6%, what is the present value of the scholarship for all these years, based on the answer in Part (i)? (Round up your final answer to thousand dollars.) (8 marks)Step by Step Solution
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