Find the rate of interest per annum

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Q1. Frances (an altruist by profession) wants to set up a fund to provide a half-yearly scholarship of $4,750 in perpetuity. Calculate the amount that should be deposited into the fund on 17 December 2021 if scholarships are paid half-yearly starting on 17 June 2025 and the fund can be assumed to earn a nominal rate of 13.6% pa compounded half-yearly. Give your answer in dollars and cents to the nearest cent.

Q2. Winy wants to set up a fund to provide a half-yearly scholarship of $1,750 in perpetuity. Calculate how much should be deposited into the fund on 19 May 2021 if scholarships are paid half-yearly starting on 19 May 2025 and the fund can be assumed to earn 2.2% pa compounding half-yearly. Give your answer in dollars and cents to the nearest cent.

Q3. If a perpetuity paying $201.60 at the end of each half-year has a present value of $4,000, find the rate of interest per annum. Give your answer as a percentage per annum to 2 decimal places.

Reference no: EM133067000

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