Many organizations use endowments to provide operating expenses or benefits. An endowment is established with a usually large principal is established in an account, at which point only interest is withdrawn for expenses with depleting the principal. Suppose a scholarship endowment is established with a generous gift of $50000 a) Create a table in Excel with months as the first column and amount in account as the second column for this account. Carry out for 12 months. Assume the interest is compounded monthly at an annual rate of 5.5% b) Does the account generate enough interest to provide a $2500 scholarship every year. Explain c) Create a table in Excel with months as the first column and amount in account as the second column for this account. Carry out for 12 months. Assume the interest is compounded monthly at an annual rate of 4.8% d) Does the account generate enough interest to provide a $2500 scholarship every year? Explain e) Estimate (using trial and error) the minimum interest rate that will allow the fund to pay out a $2500 scholarship each year
5.
Many organizations use endowments to provide operating expenses or benefits.
An endowment is established with a usually large principal is established in an
account, at which point only interest is withdrawn for expenses with depleting the
principal. Suppose a scholarship endowment is established with a generous gift
of $50000
a) Create a table in Excel with months as the first column and amount in
account as the second column for this account. Carry out for 12 months.
Assume the interest is compounded monthly at an annual rate of 5.5%
b) Does the account generate enough interest to provide a $2500
scholarship every year. Explain
c) Create a table in Excel with months as the first column and amount in
account as the second column for this account. Carry out for 12 months.
Assume the interest is compounded monthly at an annual rate of 4.8%
d) Does the account generate enough interest to provide a $2500
scholarship every year? Explain
e) Estimate (using trial and error) the minimum interest rate that will allow the
fund to pay out a $2500 scholarship each year
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