Endowed scholarship fund


A successful alumnus gives State University $2 million to establish an endowed scholarship fund. If the university can invest at 5%/yr and gives $100,000 in scholarships each year, for how many years will the endowment last?

(a) 37 years

(b) 20 years

(c) forever

(d) cannot be determined

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Finance Basics: Endowed scholarship fund
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