Description Multiple Attempts This test allows 3 attempts. This is attempt numbe
ID: 1119337 • Letter: D
Question
Description Multiple Attempts This test allows 3 attempts. This is attempt number2 Force Completion This test can be saved and resumed later This test does not allow backtracking. Changes to the answer after submission are prohibited. y Question Completion Status Close Windos A Moving to the next question prevents changes to this answer Question 3 o uestion 3 1 points Save Ans An alumnus of Universilty of Michigan-Flint engineering program wishes to and continuing infinitely The donor plans to give money now and for each of the next 2 years If the size of money that must be donated each year is at 15% start an endowment that will provide scholarship money of $40,000 per year beginning in year 5 each donation is exactly the same, calculate the amount of Moving to the next question prevents changes to this answer Question 3 of 5 Close Window o search 20 pM 12/4/2017Explanation / Answer
1.
Scholarship $40,000 per year
Rate = 15%
Number of Installments = 3
Payment = r * (PV) / (1 - (1+r)^(-n))
= 0.15 * 40,000 / (1 - (1.15)^(-3))
= 6000/0.34
= $17647.05
2.
Scholarship $40,000 per year
Rate = 15%
Number of Installments = 3
Money to be donated per year = 40,000/(1.15)^3
= $26,300.6