Can someone explain me how to get these answers! When Alfred Nobel died, he left
ID: 2383225 • Letter: C
Question
Can someone explain me how to get these answers!
When Alfred Nobel died, he left the majority of his estate to fluid five prizes to be made annually starting one year after he died (the sixth one, in economics, was added later). a. If he wanted the cash award of each of the five prizes to be $50,000 and his estate could earn 11% per year, how much would he need to fund his prizes? b. If he wanted the value of each prize to grow by 3% per year (perhaps to keep up with inflation), how much would he need to leave? a. To fund the five prizes, he would need $ 2,272,727.27. (Round to the nearest cent.) b. He would need to leave $ 3,125,000.00. (Round to the nearest cent.)Explanation / Answer
that earns 11% per year, Alfred Nobel would need:
P V = C/r = 250000/0.11 =2272727
P V = C /(r-g) = 250000/(0.11- 003) =3125000