You want to endow a scholarship that will pay $10,000 per year forever, starting one year from now. If the school's endowment discount rate is 7%, what amount must you donate to endow the scholarship? How would your answer change if you endow it now, but it makes the first award to a student 10 years from today? In the first case, the amount you must donate today is $. (Round to the nearest cent.) How would your answer change if you endow it now, but it makes the first award to a student 10 years from today? In this case, the amount you must donate today is $ (Round to the nearest cent.)

You want to endow a scholarship that will pay $10,000 per year forever, starting one year from now. If the school's endowment discount rate is 7%, what amount must you donate to endow the scholarship? How would your answer change if you endow it now, but it makes the first award to a student 10 years from today? In the first case, the amount you must donate today is $. (Round to the nearest cent.) How would your answer change if you endow it now, but it makes the first award to a student 10 years from today? In this case, the amount you must donate today is $ (Round to the nearest cent.)

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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Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will pay him $79,000 on his next birthday. However, Larry needs money today to start his college education, and his father is willing to help. Mr. Mattingly has agreed to give Larry the present value of the $79,000 future cash Inflow, assuming a 10 percent rate of return. (PV of $1 and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required a. Determine the amount of cash that Larry Mattingly's father should give him. Note: Round your final answer to the nearest whole dollar value. Cash
A recent alumnus of your university gifted money to the school to fund annual scholarships for students in need. The school expects to earn an average rate of return of 5.5% and distribute $50,000 annually in scholarships. What was the amount of the gift?
Assume you are working with the foundation to fund a scholarship in your name. Currently, the foundation can earn a 5 percent return on any donations. A. How much money would you need to donate to fund a scholarship that pays $25,000 every year forever, starting one year from now? B. How much money would you need to donate if the foundation could increase their return to 7 percent on any donations?
E
10. Tracy won a scholarship which pays $5,000 per year for the next three 3 years beginning a year from today. What is the present value of the scholarship using a discount rate of 7%? 11. Jason will receive $8,500 a year for the next 15 years. Assuming an interest rate of 7%, calculate the present value of the future payments if first receipt occurs today?
Rr.8.
A perpetuity is defined as an infinite series of equal cash flows occurring at regular intervals indefinitely. (Scholarships are an example of a perpetuity) If you want to set up a scholarship fund to support students attending domestic conferences, at an interest rate of 8%, what's the endowment value that would produce $3,000 a year in your scholarship?
An Allied Health Scholarship fund wants to insure that it can provide $50,000 annually in scholarships forever How much money would have to be reinvested each year at 8% interest to generate the funds for the scholarships?
Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $10,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit$200,000 (rounded to the nearest whole dollar) so that you can fund the scholarship forever, assuming that the account will earn 6.00% per annum every year.
You wish to establish a permanent scholarship at Bond University providing a worthy student with $1000 annually. If invested monies generate an 8% return, how much is needed in the scholarship fund?
You want to create an endowment income of $35,000 per year for Oxtordshire Charity, but the Tirst payment will not be made until the 4th year's time. a. If you can earn a return of 8% APR on your investment, and if the payment is made on a monthly basis, calculate how much to invest now? $5,133,086.81 B. $4,133,086.81 $5,233,086.81 $4,233,086.81 $5,250,000.81
Jeremiah Wood wants to set up a fund to pay for his daughter's education. In order to pay her expenses, he will need $22,000 in four years, $23,400 in five years, $24,600 in six years, and $26,100 in seven years. If he can put money into a fund that pays 5 percent interest, what lump-sum payment must Jeremiah place in the fund today to meet his college funding goals? Round the answer to the nearest cent. Round PV-factor to three decimal places.

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