finance

[tultul_gis]

Mrs. Black established a trust fund that provides $65,000 in scholarships each year for needy students. The trust fund earns a fixed 5.5 percent rate of return. How much money did Mrs. Black contribute to the fund assuming that only the interest income is distributed?

 

[tkhunny]

"A" is the amount contributed.

A * 0.055 = 65000

Solve.

 

[tultul_gis]

"A" is the amount contricuted.

A * 0.055 = 65000

Solve.

so then how do i proceed with the answer.. i am stuck.

 

[tkhunny]

You're kidding, right?

From the Problem Statement: "How much money did Mrs. Black contribute to the fund "

From my definition: ""A" is the amount contributed."

You must put these things together in your mind.

RBGTHGANH

 

[tultul_gis]

You're kidding, right?

From the Problem Statement: "How much money did Mrs. Black contribute to the fund "

From my definition: ""A" is the amount contributed."

You must put these things together in your mind.

RBGTHGANH

You gotta put A * (1+interest rate) = 65000 according to the formula.

 

[tkhunny]

You didn't listen. It is exactly as I posted it in the first place.

A * (1+(interest Rate)) = 65000 is no good. This idea will pay one scholarship in one year. You need a much larger sum of money - a sum of money so large that it generates 65,000 every year.

B = Large sum of money.

B * (1 + 0.055) = B + 65000

Solve for B and you will have the very large sum of money.

Interestingly,

B * (1 + 0.055) = B + 65000

B * (1 + 0.055) - B = 65000

B * (1 + 0.055 - 1) = 65000

B * (0.055) = 65000

Well, that looks awfully familiar. B = A!!

RBGTHGANH