You want to endow a scholarship that will pay $9,000 per year forever, starting one year from now. If the school'sendowment discount rate is 10%, what amount must you donate to endow the scholarship?The amount you must donate is $View an exampleGet more help -....(Round to the nearest cent.)Clear all

The company invests money to get a return. Before investing money company should know what amount of…

Answered: You want to endowment discount rate is…

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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You want to create a college fund for a child who is now 3 years old. The fund should grow to $60,000 in 15 years. If an investment available to you will yield 6 percent per year, how much must you invest in a lump sum now to realize the $60,000 when needed?
You You ha ue 100,000otodonate to your college. you wantto endow aperpetual scholauship that ma kes its 1stpayment in 1 year, Ifthe Colleses discount 4%0 how large will the annual scholarshie payment be? Round tothe nearest dollar
A schools parent council wants to setup up a scholarship fund. How much needs to be invested today so that a scholarship of $1000 can be awarded every year for the next 10 years. Interest on the fund is 7% and will be compounded annually
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?
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?
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.
10. Mr. Smart wants to set up an annual scholarship by donating $50 000 to the scholarship fund of his university. If the first payment is to be made in 5 years and interest is 4% compounded annually, what is the amount of the annual scholarship?
You want to create a college fund for a child who is now 3 years old. The fund should grow to $60,000 in 15 years. If an investment available to you will yield 6 percent per year, how much must you invest in a lump sum now to realize the $60,000 when needed? Round to the nearest cent. DO NOT INCLUDE COMMAS OR $.
A favorite aunt wishes to establish a trust fund for her niece's math education. How much should she set aside now if she wants $45, 000, 7 years from now, and interest is compounded continuously at 5%? O $45,000(1.05)-7 O $45,000e -1.95 $45,000e-0.35 O $45,000e-0.05 O $45,000(1.05)- -0.35

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You want to endowment discount rate is 10%, what amount must you donate to endow the scholarship? The amount you must donate is $ one year from now. If the school's (Round to the nearest cent.)