Time value Personal Finance Problem You can deposit $10,000 into an account paying 8% annual interest either today or exactly 10 years from today. How much better off will you be 25 years from now if you decide to make the initial deposit today rather than 10 years from today? The future value at the end of 25 years if you deposit $10,000 at 8% today is $ (Round to the nearest dollar.) Creating an endowment Personal Finance Problem On completion of her introductory finance course, Marla Lee was so pleased with the amount of useful and interesting knowledge she gained that she convinced her parents, who were wealthy alumni of the university she was attending, to create an endowment. The endowment will provide for three students from low-income families to take the introductory finance course each year in perpetuity. The cost of taking the finance course this year is $400 per student (or $1,200 for 3 students), but that cost will grow by 2.4% per year forever. Marla's parents will create the endowment by making a single payment to the university today. The university expects to earn 8% per year on these funds. a. What will it cost 3 students to take the finance class next year? b. How much will Marla's parents have to give the university today to fund the endowment if it starts paying out cash flow next year? c. What amount would be needed to fund the endowment if the university could earn 12% rather than 8% per year on the funds? a. For 3 students to take the finance class next year, it will cost $ . (Round to the nearest cent.) Next question Compounding frequency, time value, and effective annual rates for each of the cases in the following a. Calculate the future value at the end of the specified deposit period. b. Determine the effective annual rate, EAR. c. Compare the nominal annual rate, r, to the effective annual rate, EAR. What relationship exists between compounding frequency and the nominal and effective annual rates? a. The future value of case A at the end of year 6 is $ (Round to the nearest cent.)