A Business Group Is Considering Establishing an Endowment to Allow

question 106

Short Answer

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?

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Definitions:

Golgi Body

An organelle within eukaryotic cells that modifies, sorts, and packages proteins and lipids for transport out of the cell.

Myelinated Neurons

Myelinated neurons are nerve cells covered with a fatty substance called myelin, which increases the speed at which electrical signals travel along the nerve fibers.

Transmit Signals

The process by which information is conveyed through an organism's body or via various electronic or mechanical systems.

Absorb Nutrients

The process by which organisms take up vitamins, minerals, and other nutritional substances from their environment or diet for health and growth.