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Emma wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4=2.47% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation.   (b) Assume that the fund's earnings rate rate has changed from j4=2.47% to j4=2.22% one year before the first scholarship payment. How much does Emma need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)?   a. 120871.62   b. 117931.61   c. 116810.57   d. 113655.15

Emma wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4=2.47% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation.   (b) Assume that the fund's earnings rate rate has changed from j4=2.47% to j4=2.22% one year before the first scholarship payment. How much does Emma need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)?   a. 120871.62   b. 117931.61   c. 116810.57   d. 113655.15

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Emma wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4=2.47% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation.

 

(b) Assume that the fund's earnings rate rate has changed from j4=2.47% to j4=2.22% one year before the first scholarship payment. How much does Emma need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)?

 

a. 120871.62

 

b. 117931.61

 

c. 116810.57

 

d. 113655.15

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