The Hospital Board of Directors is gathering
information to forecast investment needs for
the organization. Adequate funding is needed to
replace worn out patient care equipment over the
next several years. The updated forecast suggests
that the hospital has to pay out $2,500,000
annually for ten years from investment funds to
meet capital budgets. If the Board Treasurer
estimates an annual fund yield of 8% , what lump
sum amount must be invested today to generate the
required ten year payout? (Please show all
calculations)