# Many academic institutions offer a sabbatical policy. Every seven years a professor is given a year free of teaching. A professor earning 70,000 per year who works for a total of 42 years what is the present value of the amount they will earn while on sabbatical, if the interest rate is 6% EAR?

Friday, October 1st, 2010

### Solution:

1. In his seventh year, the professor receives \$70,000. Since the question does not state when he receives this amount, let’s assume it is received at the end of the seventh year as a lump sum. The present value of this is \$46,554 (i.e. \$70,000/(1.06^7))
2. Similarly, the professor receives \$70,000 at the end of year 14, and the present value of this is \$30,961.07
3. Similarly, the professor receives \$70,000 at the end of year 21, and the present value of this is \$20,590.88
4. Similarly, the professor receives \$70,000 at the end of year 28, and the present value of this is \$13,694.11
5. Similarly, the professor receives \$70,000 at the end of year 35, and the present value of this is \$9,107.37
6. Similarly, the professor receives \$70,000 at the end of year 42, and the present value of this is \$6,056.92

Now we can add up each of the six present values, to arrive at the value of all the amounts received during the sabbaticals: \$126,964.34 (if you add up the numbers above you get \$126,964.35, but that’s due to rounding error).

If the professor receives the money at the middle of each year, you can re-calculate the above (e.g. by discounting the seventh year by 6.5 years rather than by 7 years).  You might also want to recalculate this assuming that the salary is paid monthly, and see how it compares to the above result.

# The Trail of Tears in 1838-1839 & the Battle of Wounded Knee in 1890 were significant because they A. demonstrate the technological superiority of the US troops over the indigenous peoples of North America B. typify the harsh treatment of Native peoples at the hands of the US government C. exemplify the determination of the American government to bring unity to North America & undermine any attempts at recession D. clarify the US government’s position on slavery & free soil” E. added large portions of land to the US which had been controlled by foreign powers

Friday, July 23rd, 2010

### Solution:

We feel that the best answer is “B”, as both events involved the deaths of large number of native Americans, including non-combatants:

1. The Trail of Tears: “The Trail of Tears was the relocation and movement of Native Americans, including many members of the Cherokee, Creek, Seminole, and Choctaw nations among others in the United States, from their homelands to Indian territory (present day Oklahoma) in the Western United States. The phrase originated from a description of the removal of the Choctaw Nation in 1831. Many Native Americans suffered from exposure, disease, and starvation while en route to their destinations, and many died, including 4,000 of the 15,000 relocated Cherokee.” (Wikipedia)
2. Battle of Wounded knee: “On December 29, 1890, 365 troops of the U.S. 7th Cavalry regiment, supported by four Hotchkiss guns, surrounded an encampment of Miniconjou (Lakota) and Hunkpapa Sioux (Lakota) near Wounded Knee Creek, South Dakota. The Sioux had been cornered and agreed to turn themselves in at the Pine  ridge Agency in South Dakota. They were the very last of the Sioux to do so. They were met by the 7th Cavalry, who intended to disarm them and ensure their compliance. During the process of disarming the Sioux, a deaf tribesman named Black Coyote could not hear the order to give up his rifle and was reluctant to do so. A scuffle over Black Coyote’s rifle escalated into an all-out battle, with those few Sioux warriors who still had weapons shooting at the 7th Cavalry, and the 7th Cavalry opening fire indiscriminately from all sides, killing men, women, and children, as well as some of their own fellow troopers. The 7th Cavalry quickly suppressed the Sioux fire, and the surviving  Sioux fled, but U.S. cavalrymen pursued and killed many who were unarmed. By the time it was over, about 146 men, women, and children of the Lakota Sioux had been killed. Twenty-five troopers also died, some believed to have been the victims of friendly fire as the shooting took place at point blank range in chaotic conditions. Around 150 Lakota are believed to have fled the chaos.” (Wikipedia)

# What is a highwayman?

Saturday, July 17th, 2010

### Solution:

A highwayman was a thief who preyed on travellers, particularly one who travelled by horse; those who robbed on foot were called footpads. Mounted robbers were widely considered to be socially superior to footpads.Such robbers operated in Great Britain and Ireland from the Elizabethan era until the early 19th century.

http://en.wikipedia.org/wiki/Highwayman