Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 4.55% p.a. compounded half-yearly (2-4.55% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation.(b) Assume that two years after the donation, Mike needs to withdraw $1,000,000 from the fund and use the remaining amount to provide an annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years after the date of the donation). What is the new annualscholarship amount (rounded to two decimal places)?O a. 104023.77b. 210414.09O c. 211782.22O d. 207744.26

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Answered: Mike wants to donate $5,000,000 to…

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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