Description of this paper

The school of engineering will be given a gift

Description

solution


Question

The school of engineering will be given a gift of $50,000 to be used for a scholarship each year. What amount can be given to a student each year beginning when the gift is given if the scholarship is to be given every year forever. The interest rate is expected to be 10% for the first 10 years, and then it is expected to drop to 6% and stay there indefinitely, but the amount of scholarship is to be kept constant (forever).

 

Paper#21600 | Written in 18-Jul-2015

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