ert- -\'\'os45-18course,/d=-61080, &content-id;=-1763643-18 ? ? Remaining Time:

Question

ert- -''os45-18course,/d=-61080, &content-id;=-1763643-18 ? ? Remaining Time: 2 hours, 14 minutes, 02 seconds. Question Completion Status: -> Moving to another question will save this response K C Question 6 of 40 Question 6 points Save Answ Assume you wish to provide students in the College of Business with a $25,000 scholarship each year forever. Assuming an interest rate of 7 percent, how much would you need to donate to the college to accomplish this goal? Words 0 Path p Question 6 of 40 1 Moving to another question will save this response 08 PM /2018 0

Explanation / Answer

This is an example of perpetuity, where $25,000 payment would be made.

We need to calculate the PV of this perpetuity. Mathematically, PV of perpetuity PV

PV = P/r

P = $25000/7% = $357,142.86 --> Amount to be domated to college today

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