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Assuming an interest rate of 4% per year (compounded annually) how much money should the department set as a goal for a fundraising campaign for the endowment fund? If only ½ of the

Assuming an interest rate of 4% per year (compounded annually) how much money should the department set as a goal for a fundraising campaign for the endowment fund? If only ½ of the

Introduction to Chemical Engineering Thermodynamics
Introduction to Chemical Engineering Thermodynamics
8th Edition
ISBN:9781259696527
Author:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Publisher:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Chapter1: Introduction
Section: Chapter Questions
Problem 1.1P
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3. The University of Massachusetts Lowell Chemical Engineering Department would like to establish an endowment fund in order to be able to maintain and operate a state of the art unit operations and dynamics laboratory. It is estimated that an annual amount of $285,000 is required every year. Assuming an interest rate of 4% per year (compounded annually) how much money should the department set as a goal for a fundraising campaign for the endowment fund? If only ½ of the possible funds were raised how long would it be before the endowment ran out?
Transcribed Image Text:3. The University of Massachusetts Lowell Chemical Engineering Department would like to establish an endowment fund in order to be able to maintain and operate a state of the art unit operations and dynamics laboratory. It is estimated that an annual amount of $285,000 is required every year. Assuming an interest rate of 4% per year (compounded annually) how much money should the department set as a goal for a fundraising campaign for the endowment fund? If only ½ of the possible funds were raised how long would it be before the endowment ran out?
Expert Solution
Step 1

Given that

Annual amount = $ 285,000

Interest rate = 4% per year ( Compounded annually )

Only half of the possible funds were raised 

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