A generous alum would like to establish an endowment that would sponsor a student organization's conferences in perpetuity. A one- time cost of $500,000 must be paid today to purchase supplies for the conference. The conference is held once every four years and costs $90,000. The first conference will take place at the end of year 4. The alum's gift is invested in an account that earns 4% annually. How much would the alum need to place in the endowment to be able to sponsor the student organization's conferences? [Enter your answer with no dollar sign or comma.]
A generous alum would like to establish an endowment that would sponsor a student organization's conferences in perpetuity. A one- time cost of $500,000 must be paid today to purchase supplies for the conference. The conference is held once every four years and costs $90,000. The first conference will take place at the end of year 4. The alum's gift is invested in an account that earns 4% annually. How much would the alum need to place in the endowment to be able to sponsor the student organization's conferences? [Enter your answer with no dollar sign or comma.]
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![A generous alum would like to establish an endowment that would
sponsor a student organization's conferences in perpetuity. A one-
time cost of $500,000 must be paid today to purchase supplies for
the conference. The conference is held once every four years and
costs $90,000. The first conference will take place at the end of
year 4. The alum's gift is invested in an account that earns 4%
annually. How much would the alum need to place in the
endowment to be able to sponsor the student organization's
conferences?
[Enter your answer with no dollar sign or comma.]
hs](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0f5822ae-cbdf-4366-81c3-77157bc1f52a%2Fbf46d342-c26c-4785-adfb-9e6b4b1e1f67%2F4okwblv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A generous alum would like to establish an endowment that would
sponsor a student organization's conferences in perpetuity. A one-
time cost of $500,000 must be paid today to purchase supplies for
the conference. The conference is held once every four years and
costs $90,000. The first conference will take place at the end of
year 4. The alum's gift is invested in an account that earns 4%
annually. How much would the alum need to place in the
endowment to be able to sponsor the student organization's
conferences?
[Enter your answer with no dollar sign or comma.]
hs
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