Calculate the present value of an ordinary annuity

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Calculate the present value of an ordinary annuity of $350 each year for five years, assuming an opportunity cost of 4 percent.

A. A generous philanthropist plans to make a one-time endowment to a renowned heart research center which would provide the facility with $250,000 per year into perpetuity. The rate of interest is expected to be 8 percent for all future time periods. How large must the endowment be?

B. James plans to fund his individual retirement account, beginning today, with 30 annual deposits of $2,000, which he will continue for the next 30 years. If he can earn an annual compound rate of 8 percent on his deposits, calculate the amount in the account upon his retirement.

Reference no: EM13761569

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