Problem 1: You've inherited $15,000,000 and have decided to use this money to open a shelter for abused women in Aurora one year from today. The annual operating costs are estimated to be $350,000 and are expected to grow at a constant rate of 2% (inflation) starting in year 2. If the interest rate is 4.5%, would you be able to fund this shelter?
Problem 2: Given the above scenario, what would be the maximum amount available for annual operating expenses?
Problem 3: What is the future value of a 20-year growing annuity if the growth rate is 2%, the annual interest rate is 6% and the payment at the end of year 1 is $5,000?