Deferred Annuities Due

[miaaaavu]

1. The Company created a $1,000,000 fund to sponsor young scientists. If the money is invested in 7,5% compounded annually, what is the amount of money that can be used at the beginning of each year?
2. The Company Invested $7,000,000 for the purpose of new business development indefinitely. If the idea is to have $500,000 available at the beginning of each year, what semi-annual interest rate must be used if the first payment deferred for three years? The interest rate for the first three years is 7% compounded yearly. The first withdrawal is due at the beginning of year 4.

Can anyone help me with these question because I think it's missing information.
Thank you.

 

[Steven G]

If you are correct that some information is missing then no one here will know if you are correct in your thinking because you did not tell us what information you think is missing. Maybe information A is in fact missing but you incorrectly think that to do able to do the problem you need information B.

Please don't code your response. Please tell us what you think is going on so that we can help you. This is why we are here, to help you, but you really need to help us as well.

 

[Otis]

… The Company created a $1,000,000 fund to sponsor young scientists. If the money is invested [at] 7,5% compounded annually, what is the amount of money that can be used at the beginning of each year?
… I think it's missing information …

Hi miaaaavu. Annual compounding is the same as simple interest. The amount of money available at the beginning of each year varies, depending on withdrawal types and amounts, so I have to assume they mean how much interest is earned each year if the principle remains in the fund because they didn't say anything about withdrawals. I assume also the fund opened on the first day of the current year.

?