A wealthy alumna of Miami University has decided to make a donation to the university in...

Transcribed Image Text:

A wealthy alumna of Miami University has decided to make a donation to the university in the form of a research grant to support student research. Funds from this research grant will be paid in 10 annual payments, with the first payment of $16,000 to be made today. The payments are scheduled to increase by 2.00% each year. If the interest rate is 1000%, what is the value today of the research grant? a) Solve this problem using a table (discount each contribution back to today) and using Excel functions b) Why can't we use the PV Excel function to solve this problem? (fill in answer on template) 1 2 Interest rate 3 Annual payment 4 Rate of increase in payment 5 Number of payments 6 7 8 Note: You may not need to fill in every row to solve the problem. 9 2329199599888838858885883888 10 11 14 16 17 20 24 PV of research grant (final answer using table) 26 30 A 34 Year Using Excel functions: 27 28 Below is space provided for intermediate calculations, if needed. On the left. provide a description for any 29 intermediate calculation set up on the right (e.g... Present value of deposits). 36 35 PV of research grant (final answer using Excel functions) 37 8 Valuing a research grant 38 Why can't we use the PV Excel function to solve this problem? Using a table Annual payment 10.00% 2.00% 10 C Present value of each payment A wealthy alumna of Miami University has decided to make a donation to the university in the form of a research grant to support student research. Funds from this research grant will be paid in 10 annual payments, with the first payment of $16,000 to be made today. The payments are scheduled to increase by 2.00% each year. If the interest rate is 1000%, what is the value today of the research grant? a) Solve this problem using a table (discount each contribution back to today) and using Excel functions b) Why can't we use the PV Excel function to solve this problem? (fill in answer on template) 1 2 Interest rate 3 Annual payment 4 Rate of increase in payment 5 Number of payments 6 7 8 Note: You may not need to fill in every row to solve the problem. 9 2329199599888838858885883888 10 11 14 16 17 20 24 PV of research grant (final answer using table) 26 30 A 34 Year Using Excel functions: 27 28 Below is space provided for intermediate calculations, if needed. On the left. provide a description for any 29 intermediate calculation set up on the right (e.g... Present value of deposits). 36 35 PV of research grant (final answer using Excel functions) 37 8 Valuing a research grant 38 Why can't we use the PV Excel function to solve this problem? Using a table Annual payment 10.00% 2.00% 10 C Present value of each payment

Answer rating: 100% (QA)

The detailed ... View the full answer