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Scholarship payment in 7 years

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Vanessa wants to create a scholarship fund by saving for several years before the fund starts making annual scholarship payments forever. She plans to save $207,000 per year for 6 years. Her first savings contribution is expected in 1 year. What is the expected amount of the scholarship payment that the fund will make in 7 years if the fund is expected to have a return of 7.60 percent per year, make annual scholarship payments that grow annually by 2.30 percent forever, and make its first scholarship payment in 7 years?

Reference no: EM132579938

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