YOU ARE PLANNING TO ESTABLISH A 20-YEAR SCHOLARSHIP FUND AT YORK UN...
1. You are planning to establish a 20-year scholarship fund at York University that will pay $25,000 at the end of the first year and then increase by 1.5% per year. The manager expects that the fund will earn a 5.75% annual rate of return. How much should you donate to York today in order to maintain this scholarship? A) $50,346 B) $146,508 C) $278,225 D) $329,235 E) $588,235 Solution: D This is a growing annuity.
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