Question 637351: a)A trust fund for childs education is being set up by a single payement so that at the end of 15 years,there will be $72,000,000.If the fund earns interest at the rate of 6% compounded semi anually,how much money should be paid into the fund initially?
b)suppose A owes B two sums of money;$300,000 due in two years and $1,800,000 due in 5 years.if A wishes to pay off the total debt now by a single payement,how much should the payement be?Assume an interest rate of 12% compounded quarterly.
Answer by rfer(16322)   (Show Source):
You can put this solution on YOUR website! A)
use Excel for calculation.
=pv(0.06/2,30,0,72000000)
=$29,663,047
B)
I am not sure if any payments have been made.
I sounds like the beginning of the first yr.
In that case I think it is just the outstanding balance.
300000+1800000=$2,100,000
I hope this does not mislead you.
Bob
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