How many years until he can establish the foundation

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Derrick Lee just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund that will earn 6%, compounded annually. (Hint: Use tables in text.)

(a) If Lee plans to establish the DL Foundation once the fund grows to $1,898,000, how many years until he can establish the foundation?

years

(b) Instead of investing the entire $1,000,000, Lee invests $300,000 today and plans to make 9 equal annual investments into the fund beginning one year from today. What amount should the payments be if Lee plans to establish the $1,898,000 foundation at the end of 9 years? (Round answer to 2 decimal places, e.g. 100,100.25.)

Reference no: EM13129620

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