How much will bob have to donate today

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Question: Bob, a retired librarian from SMU, would like to donate some money to his alma mater to endow a $5,000 annual scholarship. The first scholarship will be awarded at the beginning of year 8. The University will manage the funds and expects to earn 3.5% per year., with annual compounding.

a) How much will Bob have to donate today to ensure the endowment fund never runs out of money?

b) If Bob wants to increase the amount of the scholarship by 1% per year, how much will he need to deposit today?

Reference no: EM133264658

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