Question

Question 1 0.2 pts Parson Enterprises wants to create a scholarship fund that will award $67,056 each year. How much does Parson Enterprises need to deposit today into an account paying a nominal annual interest rate of 2.62% compounded annually to provide scholarship funds forever? Enter your answer in this format: 1234.56 Do not use a dollar sign ("$") or any commas (*)") Question 2 0.35 pts A new highway bypass is being built in the city of Eagleton. The initial cost of the bypass is $93.449.802 and it will have annual maintenance costs of $579,782. The bypass is considered to have an infinite life. Using an interest rate of 5.58%, calculate the capitalized cost of this bypass. Hint: This is assumed to be a cost. Do not use a negative sign in your answer. Enter your answer in this format: 12345.67 Do not use a dollar sign ("$"), any commas (""), or a negative sign ("-").

Answer 1

1) A = 67056

i = 2.62%

Present worth of a perpetual annual series = A/i = 67056/0.0262 = 2559389.31

2) i = 5.58%

CC = 93449802+579782/0.0558

= 93449802+10390358.4

= 103840160