Answer to Question #40015 in Economics of Enterprise for Xyrenne Gayle Lorenzo

Question

1.) A fund is to be donated by wealthy man to provide scholarships to deserving students. The fund will grant P5,000 for each semiannual of the first five years, P8000 for each quarter of the next five years, and P10,000 each month thereafter. The scholarship will start one semiannual after the fund is established. If the fund earns 8% per year compounded bimonthly, what is the amount of the donation?

2.) A woman is considering giving an endowment to a university in order to provide payments of P55,000, P85,000, respectively, at the end of the first, and second semiannual during a year. If the interest rate is 12% compounded quarterly, what is the capitalized equivalent that must be deposited now so that the semiannual payments can be repeated forever?