Asked by miguel angel martinez porras on Jun 11, 2024
Verified
A business group is considering establishing an endowment to allow eligible employees an opportunity to further their education. The amount of the grant available will be $10,000 per month. If the amount the business group is investing is $2 million, what nominal rate of return must the investment earn to fully fund the grant?
Nominal Rate
The advertised or stated interest rate of an investment or loan, not accounting for compounding or inflation.
Endowment
An endowment is a financial asset, in the form of money or property, donated to institutions or individuals, typically used for a specific purpose like a scholarship fund.
Per Month
A phrase indicating a recurring event or a calculation basis occurring every month.
- Perceive the concept of compound interest and its deployment in planning financial futures.
- Ascertain the number of intervals or the interest rate essential for achieving a predetermined financial target utilizing compound interest.
Verified Answer
Learning Objectives
- Perceive the concept of compound interest and its deployment in planning financial futures.
- Ascertain the number of intervals or the interest rate essential for achieving a predetermined financial target utilizing compound interest.
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