Ask Question
11 August, 11:20

You have $400 comma 000 to donate to your college. You want to endow a perpetual scholarship that makes its first payment in one year. If the college's discount rate is 6 %, how large will the annual scholarship payment be?

+1
Answers (1)
  1. 11 August, 11:38
    0
    Answer: The annual scholarship payment will be $24,000.00

    Explanation: Perpetuity refers to a bond or other security with no fixed maturity date.

    Using the donation of $400,000 at the discount rate of 6%. The annual scholarship will be the donated amount multiplied by the discount rate.

    That is, $400,000 * 0.06 = $24,000.00

    Therefore, the annual scholarship payment will ne $24,000.00
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “You have $400 comma 000 to donate to your college. You want to endow a perpetual scholarship that makes its first payment in one year. If ...” 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