question 10

You can make the following amounts shown in the graph below on an Urban Bangers hacking team, which you evaluate at 6% per year. To promote, market and contract the team, you will spend an equivalent future amount of $500,000 by year 9. Instead of Urban Bangers, your grandma tells you to buy a nice US Government Treasury Bond, which pays 3.5% per year. [Amounts shown below in $K] URBAN BANGERS! REVENUE $500 $500 $450 $400 $350 $300 $250 $200 $150 2 LU 4 5 6 7 8 91o. Hack3 wants to get a good public appearance by establishing a scholarship fund for computer science. Considering you evaluate at 5% per year, compounded annually for a trust, and you want to provide for 10 annual withdrawals that start at 56K and decrease by $500 each year. What is the difference between how much you gave out in scholarsh'ps vs how much you had in the account in the very beginning to start the scholarship trust? [So. you put in SK into an account and then in year 1 you take out 56K for the rst scholarship, then $5.5K for the next one... on down to year 10. By year 10, you have given out 5'! in scholarships in real money.]