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When Alfred Nobel died, he left the majority of his estate to fund five prizes, each to be awarded annually in perpetuity starting one year after he died (the sixth one, in economics, was added later) a. if he wanted the cash award of each of the five prizes to be $30,000 and his estate could earn 9% per year, how much would he need to fund his prizes? b f he wanted the value of each prize to grow by 3% per year perhaps to keep up with n ation how much would he need to eave? Assume that the first amount was still $30,000 c. His heirs were surprised by his will and fought it. If they had been able to keep the amount of money you calculated in (b), and had invested it at 9% per year, how much would they have in 2014, 118 years after his death?

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Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E ゴWrap Text ta copy ▼ B า 프 . Ej-., Δ. : r_一 逻锂函Merge & Center. $, % , 弼,8 Conditional Format CeInsert Delete Format Formatting as Table Styles2 Clear Sort &Find & Format Painter Clipboard Alignment Number Cells Edting 5117 RX RY SB SC SD SF SH SJ SK PERPETUITY nobel 5 PRIZES EACH OF 30000 SO TOTAL AMOUNT = 150000 RATE = 4 9% PEREPTUITY FORMULA AMOUNT/RATE 150000/0.09 6 AMOUNT NEEDED TO FUND THE PRIZES 1666666.67 9 GROWING PERPTUITY 10 FORMULA AMOUNT/(RATE -g) 150000/(0.09-0.03) AMOUNT NEEDED TO FUND THE PRIZES 2500000.00 12 13 14 15 16 17 18 19 /4 | CALCULATOR .. LOAN OPTIONS PRESENT VALUE = RATE YEARS 2500000.00 9% 118 FUTURE VALUE 65202878017.83 2500000 (1+0.09)4118 FORMULA AMOUNT( 1+RATE)An CAP STRU VALUE BOX DILUTIONDOLLAR COST AVGMORTGAGE EXPO SheetiSheet2Shel 福 130% rences: x261 11:45

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