Dollars will professor del rio receive at end of year nine

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Reference no: EM132053730

Mrs Emma Merker, a wealthy UI graduate, has started a permanent endowment fund at The University of Iowa by donating $500,000 to the Mechanical and Industrial Engineering Dept. Her instructions state that 1/2 of the interest each year is to be given to a certain Professor Del Rio and the other half is to remain in the fund for growth. If the University can invest the money at a market rate of 9% per year when the inflation rate is 4% per year,

a. How many dollars will Professor Del Rio receive at the end of year 9 ?

b. How many dollars will be in the fund 20 years from now?

Reference no: EM132053730

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