Question

How much did this grant cost the Foundation when it was announced?

Answer 1

`P=D\lbrack(r/m)/(1-(1+r/m)^(-mt))\rbrack`

Use the given data in the formula above to calculate grant cost the Foundation when it was announced (P (Initial principle))

`\begin{gathered} D=50,000,000 \\ r=0.068 \\ m=1 \\ t=5 \\ \\ \end{gathered}`
`\begin{gathered} P=50,000,000\lbrack(0.068/1)/(1-(1+(0.068/1)^(-1(5)))\rbrack \\ \\ P=50,000,000\lbrack(0.068)/(1-(1.068)^(-5))\rbrack \\ \\ P\approx12,129,303.96 \end{gathered}`

Then, this grant cost $12,129,303.96 when it was announced