Exam3 Solution - IME 3100 EXAMINATION #3 Name: Date:...

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IME 3100 EXAMINATION #3 Name: SOLUTION Date: 11-Apr-07 Problem Points 1 2 3 4 TOTAL: 0 Out of 100
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Required CHECK 0 $508,349.29 NPV 1 $72,377.50 $72,377.50 $72,377.50 2 $72,377.50 $72,377.50 $72,377.50 3 $72,377.50 $72,377.50 $72,377.50 4 $72,377.50 $72,377.50 $72,377.50 5 $72,377.50 $72,377.50 $72,377.50 6 $72,377.50 $72,377.50 $72,377.50 7 $72,377.50 $72,377.50 $626,356.44 $72,377.50 8 $72,377.50 None $0.00 9 $72,377.50 X $112,408.91 $112,408.91 10 $1,000,000 $72,377.50 X $767,313.57 $232,686.43 $112,408.91 $112,408.91 $1,000,000.00 FV Planned Deposits Actual Deposits Value of Deposits FV of deposits at Deposits of X each 1. The Association of General Contractors (AGC) wishes to set up an endowment fund of $1,000,000 at the end of 10 years for the awarding of scholarships to students majoring in building construction. In doing so, the AGC establishes an escrow account in which 10 equal end-of-year deposits (starting at EOY 1) are to be made. The funds in the escrow account will earn 7% interest compounded annually. The first seven deposits were made as scheduled. Due to some problems, there was no deposit made at EOY 8. What equal amounts must now be deposited at EOY 9 and 10 to ensure that $1 million are available at EOY 10 as initially planned? ANSWER: $ 112,408.91
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This test prep was uploaded on 04/07/2008 for the course IME 3100 taught by Professor Kailashbafna during the Spring '07 term at Western Michigan.

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Exam3 Solution - IME 3100 EXAMINATION #3 Name: Date:...

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