Business, 10.09.2019 18:30 elizabethhubbe

Creating an endowment personal finance problem on completion of her introductory finance course, marla lee was so with the amount of useful and interesting knowledge she gained that she convinced her parents, who were wealthy alumni of the university she was attending, to create an endowment. the endowment will provide for three students from low-income families to take the introductory finance course each year in perpetuity. the cost of taking the finance course this year is $300 per student (or $900 for 3 students), but that cost will grow by 2.2% per year forever. marla's parents will create the endowment by making a single payment to the university today. the university expects to earn 6% per year on these funds. a. what will it cost 3 students to take the finance class next year? b. how much will marla's parents have to give the university today to fund the endowment if it starts paying out cash flow next year? c. what amount would be needed to fund the endowment if the university could earn 8% rather than 6% per year on the funds?

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