Ask Question
14 April, 21:28

You want to endow a scholarship that will pay $ 9 comma 000$9,000 per year forever, starting one year from now. if the school's endowment discount rate is 10 %10% , what amount must you donate to endow the scholarship?

+4
Answers (1)
  1. 14 April, 21:43
    0
    The amount that will be needed in 1 year's time for endowment is:

    amount / (rate)

    =9000/0.1

    =$90,000

    Therefore the current amount needed for donation will be given by:

    PV=P (1+r/100) ^-n

    =90000 (1+10/100) ^-1

    =90000/1.1

    =$81,818.2
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “You want to endow a scholarship that will pay $ 9 comma 000$9,000 per year forever, starting one year from now. if the school's endowment ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers