You would like to endow a scholarship for students at university. You plan on giving $100,000 dollars to the university for this purpose. Every year for all time, the scholarship will pay an award to one lucky student. These awards are schedule to start next year. To keep up with the rising cost of tuition, the award will grow at a rate of 4% a year after the first year. 

If the university will invest your endowment in a savings account that earns 5.8% interest, what will the award be in the first year?

Answer rating: 100% (QA)

To calculate the award for the first year we need to determine ... View the full answer