Question: You would like to pay a $16000 scholarship. You expect it to grow to match inflation each year. Tuition rise 2.4% per year, with a

You would like to pay a $16000 scholarship. You expect it to grow to match inflation each year. Tuition rise 2.4% per year, with a nominal rate of return in the endowment fund at 5% per year.

A.) How much needs to be donated to the endowment fund to provide the scholarship?

B.) What will the nominal value of the scholarship be in five years?

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Question: You would like to pay a $16000 scholarship. You expect it to grow to match inflation each year. Tuition rise 2.4% per year, with a

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