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How do you calculate the annual scholarship payment?

A scholarship provider has $500,000 which she will invest today to fund a scholarship forever. She expects to earn 8% on her money each year. If she wants to begin paying out the scholarship starting today, what will the annual scholarship payment be?

$40,000.00
$37.037.04
6,750,000.00
$36,800.00

Solution Summary

Solution describes the steps to calculate the annual scholarship payment in the given case.

$2.19