Posted by **Jessie** on Tuesday, January 15, 2013 at 4:59am.

Suppose that a company decides to make an annual gift to fund undergraduate scholarships. The first of these gifts will be given today and it is anticipated that the gifts will continue forever. The nominal discount rate is

8% and the rate of inflation is 2%.

The company anticipates that, in each of the next 50 years, it can

recruit one candidate to start a perpetual gift of $10,000 per year in real terms, i.e., this year the department receives one $10,000 gift, next year it receives two such gifts, the next year three gifts and so on. After year 50, no new donors are recruited, so the department receives 51 gifts per year from the existing donors. What is the present value of all of the scholarship gifts that the company anticipates receiving?

## Answer This Question

## Related Questions

- probability - There are four children of diff erent ages in a family. Their mom ...
- statistics - There are four children of di erent ages in a family. Their mom ...
- Math - serigo has 30 gifts numbered from 1 to 30. There is a kite in each gift ...
- confused - serigo has 30 gifts numbered from 1 to 30. There is a kite in each ...
- statistics - I am having a hard time trying to figure out this question. Any ...
- Math - a gift store owner used 9 rolls of wrapping paper to wrap his customers' ...
- 8th grade math - Every year on the first day of Christmas my true love gives me ...
- algebra - A person bought 17 gifts for his nieces and nephews. The gifts were ...
- Math - Dalia made 8 party bags for her birthday party. Each bag contained 4 ...
- Finance - Dominique has just turned 65 and she has deposited her annual payment ...

More Related Questions