Question & Answer: Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund that wil…..

Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund that will earn 10%, compounded annually. (Use the tables below.)

If Bogut plans to establish the AB Foundation once the fund grows to $2,593,740, how many years until he can establish the foundation? years LINK TO TEXT

Instead of investing the entire $1,000,000, Bogut invests $300,000 today and plans to make 9 equal annual investments into the fund beginning one year from today. What amount should the payments be if Bogut plans to establish the $2,593,740 foundation at the end of 9 years? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Payments $

Expert Answer

 

It will take 10 years.

Each payment is $138,912.

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