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You have $100,000 to donate to your college. You want to endow a perpetual scholarship that makes its first payment in 1 year. If the college's discount rate is 5%, how large will the annual scholarship payment be?

Respuesta :

abiolataiwo2015

Answer:

$5,000

Explanation:

Calculation for how large will the annual scholarship payment be

Using this formula

Cash Flow= Present Value x Rate

Where,

Present Value =$100,000

Rate=5%

Let plug in the formula

Cash Flow=$100,000*5%

Cash Flow=$5,000

Therefore how large will the annual scholarship payment be is $5,000.

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