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PLEASE SHOW WORK USING THE FORMULAS BELOW: #BostonCares has raised money to create a scholarship for children of families who lost their homes in the
PLEASE SHOW WORK USING THE FORMULAS BELOW: #BostonCares has raised money to create a scholarship for children of families who lost their homes in the California wildfires this fall. They raised $200,000 and plan to award a scholarship each year and want the amount awarded to grow at 2% per year forever. If the first scholarship will be awarded 4 years from today and the interest rate is 5%, how much will the first scholarship payment be? A) $6,000 B) $6,615 C) $6,946 D) $7,293 FORMULAS 7% = C(1 + r)n Future Value of a Cash Flow Present Value of Future Cash Flow Present Value of a Perpetuity Present Value of an Annuity Cash Flow in an Annuity PV = PV-c.(1 _ (11)n) PV PV=- Present Value of a Growing Perpetuity PVsCxF1?(1-( g)") Present Value of a Growing Annuity 1+EAR = (1 +m" Converting APR to EAR (APY) m-# compounding periods
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