Question

answer question B

On completion of MBA 621, Eddie and Mike were so please useful and interesting knowledge that trends, who are wealthy alums to create a scholarship. The scholarship friends who knowledge that they had learned that they convinced some three needy students to take the course in perpet books for each student for the course is $2000. The univer fund. The scholarship will be created by a single payment to the unive friends. e a scholarship. The scholarship will allow e course in perpetuity. The annual cost of tuition and ne course is $2000. The university will earn 6% on the y a single payment to the university from their A.) How large must the payment be to fund the scholarship? 2000 x 4 = 133,333,33 0.06 B.) John has deposited $1000 in a savings account. The account pays a nominal annual interest rate of 9%. However, the interest in compounded continuously. How much money should John have in his account at the end of the 2 year period?

Answer 1

b) Continuous compounded amount(A)=P*e^rt

where P= principal amount

e=2.7183 (fixed)

r=rate i.e.9% or .09

t=period i.e. 2

A=1000*2.7183^{^(.09*2)}

=1197.2188 Approx

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