W99NOONQ1.2
Now say that you want the first scholarship of $10,000 to be paid 3 years from today and that you want the amount of the scholarship to keep up with inflation after that. If inflation is expected to be 3% and you can still earn a nominal return of 9% on your money, what will it cost to endow the scholarship today? (3 pts)
Did moving the start of the scholarship to year 3 positively or negatively impact the cost? WHY?
Did making the scholarship keep up with inflation positively or negatively impact the cost? WHY?