Question

As director of development for Southern Ohio State University (SOSU), you have been charged with developing a plan to endow 12 men’s basketball scholarships. The current cost of a scholarship athlete is $45,000. With tuition expenses expected to increase at a 5.5% rate annually and the endowment’s return expected to average 7% over time, calculate the total amount that will have to be raised to fully endow the 12 scholarships.

Based on your work in Problem 1, develop a major gifts table for the capital campaign. Explain the method you used to construct the chart.

Answer 1

Answer:

Description	vlue
tution expenses increase	5.50%
expected return on endow	7%
diff(a)	-1.50%
scholship for student(b)	45,000
amount to be raised per student(bx(1+a)	44,325
total amount to be raised	531,900