You need to invest each year to make the required donation

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Reference no: EM131851692

You are planning a gift to a University. The gift will be an amount of money that is enough to pay the salary of one finance professor the equivalent of $170,000 per year today each year forever, with the first payment made one year after you make the donation.Assume that inflation is 2% forever, that you will donate the gift 50 years from today, and that you can earn 6% annually on your investment. A. How much will that professor be paid at the end of the first year of the endowment? B. How much do you need to donate in order to make all the payments? C. How much do you need to invest each year to make the required donation?

Reference no: EM131851692

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