1. You want to endow a scholarship that will pay $10,000 per year forever, starting one year from now. The school’s endowment discount rate is 7%. What amount must you donate to endow the scholarship?
2. If you endow it today, but it makes the first award to a student 10 years from today. Under this circumstance, what amount must you donate to endow the scholarship?
You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires monthly payments and has an APR of 6% per year.
What will your monthly payment be if you take this mortgage?