Suppose $90,000 was invested on January 1, 1980 at an annual effective interest rate of 4%...

Suppose $90,000 was invested on January 1, 1980 at an annual effective interest rate of 4% in order to provide an annual (calendar-year) scholarship of $5,000 each year forever, the scholarships paid out each January 1.

(a)

In what year can the first $5,000 scholarship be made?

(b)

What smaller scholarship can be awarded the year prior to the first $5,000 scholarship? (Round your answer to the nearest cent.)

Expert Solution

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Colby Messinger answered 2 years ago

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