1 Rory's foundation supports numerous children's charities.Suppose Rory wanted to establish a scholarship fund which would pay an annual scholarship of $25,000 forever. Scholarships would be paid at the beginning of each year.How much would Rory have to invest today to establish this scholarship fund? Assume the account can earn interest of 5.50% compounded annually.

2 What is the value today of $300 received at the end of each year forever if the interest rate is 4% per year?

3 Debbie has won a lottery in which she is to receive $3,300 each year for the next 27 years. She would like to determine the present value of this annuity. She has been quoted an interest rate of 5.75% compounded quarterly.Debbie should use ____% as the appropriate interest rate to determine the present value of her annuity.

Answer rating: 100% (QA)

Rorys Scholarship Fund To calculate the present value needed we use the perpetuity formu... View the full answer