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If you still donate the $100,000 from the previous problem (investment made today), but ask the college to delay the scholarship payment so that the first scholarship payment is made 10 years from today, then how large will the annual payment be

Sagot :

Answer:

$5,920.98

Explanation:

The computation of the annual scholarship payment would be shown below:

Future value = Donated amount × (1 + rate of interest)^number of years

= $100,000 × (1 + 0.04)^10

= $148,024.43

Now the annual scholarship payment would be

= $148,024.43 × 0.04

= $5,920.98

Hence, the annual scholarship payment is $5,920.98

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