Answer:
The amount of money needed for the fund, if the interest is 5℅ is calculated as follows:
(5% of $100,000) + $100,000
= $5000 + $100,000 = $105,000
(b) In years 100, the interest will be 50%(explained below)
50% of $100,000 is $50,000
If perpetual fund is $100,000,
The amount of money needed for the replanting fund after year 100 is
$100,000 + $50,000 = $150,000
Explanation:
(a) part
After 10 years, the interest is 5%.
5% of 100,000 = (5/100) x 100,000 = $5,000.
The interest will be added to perpetual fund.
Therefore,
The amount needed for the fund after 10 years is
Interest after ten years + perpetual fund = $5,000 + $100,000 = $105,000.
(b) part
If the last replanting is year 100 ago, the percentage interest can be analyzed as follows:
5% in 10years
10% in 20years
15% in 30years
20% in 40years
25% in 50years
30% in 60years
35% in 70years
40% in 80years
45% in 90years
50% in 100years.
