Question
After inheriting $1,000,000, you decide to make an endowment to DBU that will fund a scholarship of $8,000 every year for the next 30 years.
After inheriting $1,000,000, you decide to make an endowment to DBU that will fund a scholarship of $8,000 every year for the next 30 years. The market interest rate for a deposit account that will disperse such an annuity is 9.5%, compounded annually. What amount must you invest in this account today to fund this annuity for 30 years (the 30th payment will zero out the account)?
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Essentials of Managerial Finance
Authors: Scott Besley, Eugene F. Brigham
14th edition
324422709, 324422702, 978-0324422702
