A scholarship fund earns an effective annual rate of 10%. How much does the scholarship fund need today if the fund pays an annual amount of $6,500, the first payment being one year from now, and grows at 2% per annum for an infinite period?

2.What is the Payback Period for a project that has an initial outlay of $1200 and annual net cash flows of $325 (to 3 decimal places)?

3.Gi Gi has an opportunity to invest $24,000 today at a nominal interest rate of 7.8% per annum, compounding weekly. If she wants this to grow to $30,000, how long does she need to hold her investment?

4.James has a 5.5 year loan of $75,000 with ANZ Bank. He plans to repay the loan in 11 equal semi-annual instalments starting today. If the rate of interest is 5.8% p.a. compounding semi-annually, how much will each repayment be worth?

5.A managed fund run by Canowindra Investments Ltd is offering a rate of return of 6% per annum, compounded monthly, after fees. If Samantha deposits $10,000 in this fund, how many years will it take for her investment to grow to $18,000?

Answer rating: 100% (QA)

To calculate the present value of the scholarship fund we will use the Gordon Growth Model formula for perpetuity with growth PV A r g Where PV Presen... View the full answer