You manage a food bank in your community. You estimate that you will need $200,000 per...

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You manage a food bank in your community. You estimate that you will need $200,000 per...

You manage a food bank in your community. You estimate that you will need $200,000 per month to meet the needs of your population. If you can earn 3% APR, compounded monthly on your investments, how much do you have to invest today to fund one year for your community ?

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Answer 1

Answer #1

Annual Interest rate: 3%
Monthly rate of interest (3/12): 0.25%
Months	Expenses	PVf at 0.25%	Present value
1	200000	0.997506	199501.2
2	200000	0.995019	199003.7
3	200000	0.992537	198507.5
4	200000	0.990062	198012.4
5	200000	0.987593	197518.6
6	200000	0.98513	197026.1
7	200000	0.982674	196534.7
8	200000	0.980223	196044.6
9	200000	0.977779	195555.7
10	200000	0.97534	195068.1
11	200000	0.972908	194581.6
12	200000	0.970482	194096.4
Present value of expenses			2361451

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Answer 2

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