You want to endow a scholarship that will pay $10,000 per year forever, starting one

year from now. The schools endowment discount rate is 7%.

What amount must you donate to endow the scholarship?

QUESTION 5

If you endow it today, but it makes the first award to a student 10 years from today.

Under this circumstance, what amount must you donate to endow the scholarship?

You are thinking of purchasing a house. The house costs $350,000. You have $50,000

in cash that you can use as a down payment on the house, but you need to borrow

the rest of the purchase price. The bank is offering a 30-year mortgage that requires

monthly payments and has an APR of 6% per year.

What will your monthly payment be if you take this mortgage?

QUESTION 11

From Question #10, how much interest is paid off in your first mortgage payment?