Question

A Joe and Jorge both graduated from an engineering college and decided to donate money to their college. They set up 10 engineering scholarships per year starting in 2046 for every year (assume more than 100 years). If $50,000 is invested in the trust fund in the year 2021 and if it earns a very good rate of return of 12% per year, what will the amount of each scholarship be starting in 2046

Answer 1

Each scholarship will have an amount of $ 85,000.

Step-by-step explanation:

Since Joe and Jorge both graduated from an engineering college and decided to donate money to their college, and they set up 10 engineering scholarships per year starting in 2046 for every year, if $ 50,000 is invested in the trust fund in the year 2021 and if it earns a very good rate of return of 12% per year, to determine what will the amount of each scholarship be starting in 2046 the following calculation must be performed:

(50,000 x 1.12 ^ (2046-2021)) / 10 = X

(50,000 x 1.12 ^ 25) / 10 = X

850,003.22 / 10 = X

85,000.32 = X

Therefore, each scholarship will have an amount of $ 85,000.