2) A generous philanthropist plans to make a one-time endowment to a renowned heart research center which would provide the facility with $250,000 per year into perpetuity. The rate of interest is expected to be 8 percent for all future time periods. How large must the endowment be?
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2) A generous philanthropist plans to make a one-time endowment to a renowned heart research center which would provide the facility with $250,000 per year into perpetuity. The rate of interest is expected to be 8 percent for all future time periods. How large must the endowment be?
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- Comprehensive The following are three independent situations: 1. K. Herrmann has decided to set up a scholarship fund for students. She is willing to deposit 5,000 in a trust fund at the end of each year for 10 years. She wants the trust fund to then pay annual scholarships at the end of each year for 30 years. 2. Charles Jordy is planning to save for his retirement. He has decided that he can save 3,000 at the end of each year for the next 10 years, 5,000 at the end of each year for Years 11 through 20, and 10,000 at the end of each year for Years 21 through 30. 3. Patricia Karpas has 200,000 in savings on the day she retires. She intends to spend 2,000 per month traveling around the world for the next 2 years, during which time her savings will earn 18%, compounded monthly. For the next 5 years, she intends to spend 6,000 every 6 months, during which time her savings will earn 12%, compounded semiannually. For the rest of her life expectancy of 15 years, she wants an annuity to cover her living costs. During this period, her savings will earn 10% compounded annually. Assume that all payments occur at the end of each period. Required: 1. In Situation 1, how much will the annual scholarships be if the fund can earn 6%? How much at 10%? 2. In Situation 2, (a) How much will Charles have at the end of 30 years if his savings can earn 10%? How much at 6%? (b) If Charles expects to live for 20 years in retirement, how much can he withdraw from his savings at the end of each year if his savings earn 10%? How much at 6%? (c) How much would Charles need to invest today to have the same amount available at the time he retires as calculated in Situation 2(a) at 10%? How much at 6%? 3. In Situation 3, how much will Patricias annuity be?Solve the question: A generous philanthropist plans to make a one-time endowment to a renowned heart research center which would provide the facility with $250,000 per year into perpetuity. The rate of interest is expected to be 8 percent for all future time periods. How large must the endowment be?A generous benefactor to DePaul plans to make a one-time endowment which would generate $15,000 of income each year into perpetuity. The rate of interest is expected to be 5 percent for all future time periods. How large must the endowment gift be? (Please show work)
- Jackson Clinic is starting an endowment fund to pay for the expenses of a allied health training program. The expenses are $2,500,000 per year, and the program needs to be endowed for 50 years. Assuming payments are made at the end of each year and the interest rate is 7% per year, what should be the initial size of the endowment?Don Solomon wants to set up a scholarship program with his alma mater. If ₱778111 is needed per year for the scholars, how much must he invest today at 2.4% compounded annually to fund the scholarship program in perpetuity?A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of one student each year in perpetuity at her university. To adequately prepare for the administration of the scholarship, the university will begin awarding it starting in three years. The estimated full cost of one student this year is $32,000 and is expected to stay constant in real terms in the future. If the scholarship is invested to earn an annual real return of 10 percent, how much must the donor contribute today to fully fund the scholarship? Please do not give solution and formulae in image format.. thanku
- A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of one student each year in perpetuity at her university. To adequately prepare for the administration of the scholarship, the university will begin awarding it starting in three years. The estimated full cost of one student this year is $38,000 and is expected to stay constant in real terms in the future. If the scholarship is invested to earn an annual real return of 5 percent, how much must the donor contribute today to fully fund the scholarship?. James decided to fund a school in Orange County in perpetuity. The first payment will be made three years from today (at the end of year three) and will be $5,320. Each year after that, the school will receive payment from James annually. The payment will increase at a rate of 3% per year after the first payment. If the annual interest rate is 9%, what is the present value of this endowment?A man wishes to donate immediately to a University sufficient money to provide for the erection and maintenance, for the next 50 years of a building which will cost $ 500,000 to erect and will require $ 1000 at the end of each month to maintain. How much should he donate if the University is able to invest its funds at 8% compounded semi-annually?
- Beginning next year, a foundation will support an annual seminar on campusby using the interest earnings on a $100,000 gift it received this year. It is determined that 6% interest will be realized for the first 10 years, but that plans should be made to anticipate an interest rate of only 4% after that time. What amount should be added to the foundation now in order to fund the seminar at a level of $10,000 per year into infinity?A fund is to be donated by a wealthy man to provide annual scholarships to deserving students. The fund will grant P50,000 for each year for the first 5 years at 8% compounded monthly, P80,000 for each year for the next 5 years at 8% compounded quarterly, and P100,000 each year thereafter at 8% compounded semi-annually interest,. The scholarship will start one year after the fund is established. What is the amount of the donation?A generous benefactor to the local ballet plans to make a one−time endowment which would provide the ballet with $150,000 per year into perpetuity. The rate of interest is expected to be 5 percent for all future time periods. How large must the endowment be? This is finance class dealing in FV and PV. I would like the answer in an Excel format.
