You have $500,000 to donate to your college. The college's discount rate is 7%. You donate the money today, but you ask the college to delay the scholarship payment so that the first scholarship payment is made 10 years from today. How large will the annual payment be?

You have $500,000 to donate to your college. The college's discount rate is 7%. You donate the money today, but you ask the college to delay the scholarship payment so that the first scholarship payment is made 10 years from today. How large will the annual payment be?

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter13: Investment Fundamentals

Section: Chapter Questions

Problem 3DTM

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Question

You have $500,000 to donate to your college. The college's discount rate is 7%. You donate the money today, but you ask the college to
delay the scholarship payment so that the first scholarship payment is made 10 years from today. How large will the annual payment be?
The annual scholarship payment will be $
(Round to the nearest cent.)

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