You decide to give SCU an endowment as a lump sum of $1,000,000. You would like to specify that this will pay out an income stream of $R per year, with an annual increase of $1000 per year, continuing forever. Assume that you can lock in an 5. interest rate of 5%. What value of R would match your lump sum donation of $1,000,000?
You decide to give SCU an endowment as a lump sum of $1,000,000. You would like to specify that this will pay out an income stream of $R per year, with an annual increase of $1000 per year, continuing forever. Assume that you can lock in an 5. interest rate of 5%. What value of R would match your lump sum donation of $1,000,000?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 23E
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