Art Arfons, a K-State-educated engineer, has made a considerable fortune. He wishes to start a perpetual scholarship for engineering students at K-State. The scholarship will provide a student with an annual stipend of $2500 for each of 4 years (freshman through senior), plus an additional $5000 during the senior year to cover entertainment expenses. Assume that students graduate in 4 years, a new award is given every 4 years, and the money is paid at the beginning of each year with the first award at the beginning of Year I. The interest rate is 8%.
(a) Determine the equivalent uniform annual cost (EUAC) of providing the scholarship.
(b) How much money must Art donate to K-State?