What will the size of the annual scholarship payment be

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Problem 1: A wealthy philanthropist has agreed to donate $100,000 per year to an educational foundation for the next 10 years. The money will be invested in an account that delivers a return of 5% p.a At the end of the 10-year investment period the balance of the account will be used to fund a scholarship for deserving students, in the form of an annual perpetuity with the first payment in Year 11. What will the size of the annual scholarship payment be?

Option 1: $50,000.00

Option 2: $43,555.27

Option 3: $37,110.54

Option 4: $62,889.46

Reference no: EM132623693

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