On what date will the first scholarship payment be made

Reference no: EM13286581

A bequest of $250,000 was invested on September 1, 2000 at an effective annual interest rate of 4% in order to provide an annual scholarship of $20,000 on September 1 forever, starting as soon as possible. Interest is credited every August 31.

a) On what date will the first scholarship payment be made?

b) What smaller payment could be made one year earlier without delaying the start of the full scholarship payments?

Reference no: EM13286581

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