Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You think it would be really neat to walk out on the field at half time of an Illinois home football game to present the

image text in transcribed
You think it would be really neat to walk out on the field at half time of an Illinois home football game to present the Athletic Association with a check to endow a football scholarship. You plan is to do this 30 years from today. By then, the Athletic Association estimates they will need an amount equal to the present value at 4.5% of a perpetuity paying $75,000 a year in order to endow this scholarship. Undaunted, you decide to try to meet this goal by making 30 equal end of year deposits that will earn 7.5% compounded annually in addition to an initial deposit of $20,000 that you would make today.. How large of an annual deposit must you make in order to endow this football scholarship? A) $14,994 B) $16,119 C) $14,425 D) $13,939 E) $13,419

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

History Of Financial Institutions Essays On The History Of European Finance 1800–1950

Authors: Carmen Hofmann , Martin L. Müller

1st Edition

1138325007, 978-1138325005

More Books

Students also viewed these Finance questions