Newman Bogut just received a signing bonus of $939,000. His plan is to invest this payment in a fund that will earn 10%, compounded annually.
a)If Bogut plans to establish the AB Foundation once the fund grows to $2,214,115, how many years until he can establish the foundation? = 9 years.
b) Instead of investing the entire $939,000, Bogut invests $285,400 today and plans to make 9 equal annual investments into the fund beginning one year from today. What amount should the payments be if Bogut plans to establish the $2,214,115 foundation at the end of 9 years?