Q4. Aloma, a university graduate who started a successful business, wants to start an endowment in her name that will provide scholarships to ME students. She wants the scholarship to provide $11,000 per year and expects the first one to be awarded on the day she fulfills the endowment obligation. If Aloma plans to donate $140,000, what rate of return must the university realize in order to award the annual scholarship forever? The rate of return that the university must realize in order to award the annual scholarship forever is %.

Q: 5%, what amount must you donate to endow the scholarship?

A: Present Value of Perpetuity: It refers to the present worth of annual cash flows having an infinite…

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A: Amount needed in 4 years (CF1) = $25,000 Amount needed in 5 years (CF2) = $26900 Amount needed in 6…

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A: Given information: Annual cash flow is $10,000 per month Discount rate is 7% Number of years is 10

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A: Amount we need to invest is present value of amount required

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A: Compound interest is referred as the in interest calculated on principal along with all accumulated…

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A: An annuity is the sum of equal payments made for a certain period, at a particular rate of return.…

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A: Framework:If P is the perpetuity and r is the discount rate, then PV of a perpetuity = P / rAmount…

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A: Present value of Perpetuity refers to the present worth of investment today on which the periodic…

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A: Present value of annuity due = (Annual scholarship payment / Interest rate) + Annual scholarship…

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A: The equivalent annual deposit is the periodic payment made towards the acquisition of an asset or…

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A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

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A: Given: Scholarship amount (PMT)=$200000Interest rate =7% or 0.07

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A: This payment is a perpetuity, meaning that this payment will occurs indefinitely. In a perpetuity,…

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A: Given, The Donation made is $2,000,000 Returns is 5.5%

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A:

Q: 0,000 now for the college education of his 2 year old son. If the fund earns 14% effective, how much…

A: The given problem can be solved using PMT and FV function in excel. FV function computes amount…

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A:

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A: Given: N = 24, FV = 0, PMT = 1750, rate = 2.4%/12 = 0.2

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A: This question require us to compute the amount of gift which will provide $50000 annual scholarship…

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A: Diagram:

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A: Future Value: The future value is value of present amount compounded at an interest rate until a…

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A: We need to find present value of future donation by using this equation. Present value =FV(1+r)n…

Q: Mr. Blochirt is creating a college investment fund for his daughter. He will put in $850 per year…

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A: In this we have to calculate the present value of perpetuity.

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A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…

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A: We will find present value of the future requirement of funds to know what amount we must invest to…

Q: what is the amount of the annual scholarship?

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A: Hi, since you have posted multiple questions, I will answer the first one , as per the guidelines.…

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A: EAR is the actual return earned on an investment by the investor taking into account the effect of…

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A: Present value of annual cash flow to be in perpetuity If a cash flow annually occur in perpetuity,…