What should the size of the annual donation be

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Problem 1: A charitable foundation plans to award a scholarship of $50,000 per year to a deserving student, in perpetuity. The first scholarship payment will be made 5 years from now. To fund its plan, the foundation has asked its backers to commit to an annual donation at the end of each year, for the next 5 years. What should the size of the annual donation be, if the money will be invested in an account that delivers a return of 5% p.a.?

Reference no: EM132623903

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