You have decided to endow Faculty of Business, Dokuz Eylul University with a scholarship. It is expected to cost $6,000 per year to attend the university into perpetuity. You expect to give the university the endowment in 6 years and will accumulate it by making equal annual (end-of-year) deposits into an account. The rate of interest is expected to be 13% for all future time periods.
a. How large must the endowment be?
b. How much must you deposit at the end of each of the next 6 years to accumulate the required amount?
a) endowment will be
b)we need to accumulate $46,153.8462 in 6 years