You want to end endow ment discount rate is 5%, what amount must you donate to...

Question

Question

Answer 1

Answer #1

1) Donation today:

= $12,000/5%

= $240,000.00

2)

	Donation today -First payment in 10 years	FV×(1÷(1+r)ⁿ)

	Here,

1	rate per annum	5.00%
2	Number of years	9
3	Number of compoundings per per annum	1
4 = 1÷3	rate per period ( r)	5.00%
5 = 2×3	Number of periods (n)	9
	Perpetuity value in 9 years (FV)	$240,000

	Donation today -First payment in 10 years	$154,706.14
		240000*(1/(1+0.05)⁹)

Answer 2

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