Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. mike wants to donate $5,000,000 to establish a fun

Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in...

70.2K

Verified Solution

Question

Finance

Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 3.81% p.a. compounded half-yearly (j2=3.81% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation.

(a) What is the amount of the annual scholarship ?

a.209166.90

b.104674.88

c.211343.81

d.212454.42

(b) Assume that two years after the donation, Mike needs to withdraw $1,000,000 from the fund and use the remaining amount to provide an annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years after the date of the donation). What is the new annual scholarship amount?

a.85261.97

b.172148.19

c.170347.88

d.173066.86

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Are leaders born or made? Explain your answer.

General Management
Q

Describe the major risks of international diversification in parapgraph form.

General Management
Q

The position co ordinates of a projectile thrown from ground are given by y 12t...

Physics
Q

Journalize the adjusting entry needed at March 31, the fiscal year-end, for the independent situations....

Accounting
Q

QUESTION 11 Boston Recyclers Company uses the indirect...

Accounting
Q

what is an example of earnings management for clorox company? and explain its significance. (it...

Accounting
Q

Required information [The following information applies to the questions displayed below.] Vigeland Company completed the...

Accounting
Q

On October 28, 2018, Mercedes Company committed to a plan to sell a division that...

Accounting
Q

HedSound manufactures headphone cases. During September 2016, the company produced and sold 108,000 cases and...

Accounting
Q

Washington's Quality Automotive Worksheet (Partial) December 31, 2016 Trial Balance Account Title Debit Debit 47....

Accounting
Q

A hedge fund has $105mm AUM (assets under management) with a high-water mark clause and...

Finance
Q

4. In a continuous review system of inventory management focusing on EOQ A. All answers...

Accounting