What annual rate of return is the foundation earning

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A charitable foundation received a donation from a wealthybuilding contractor in the amount of $5 million. It specifiesthat $200,000 is to be awarded each year for 5 years starting now(i.e., 6 awards) to a university engaged in research pertaining to the development of layered composite materials. Thereafter, grants equal to the amount of interest earned each yearare to be made. If the size of the grants from year 6 intothe indefinite future is expected to be $1,000,000 per year, whatannual rate of return is the foundation earning?

Reference no: EM13243804

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