Problem
A donor wishes to endow an engineering scholarship at USYD. The endowment may be made by a lump-sum deposit to a special foundation set up by the university for such purposes. The foundation director believes that its funds will earn at least 8% interest per year, tax free, for the indefinite future.
The scholarship is to provide $10,000 per year. On the assumption that the scholarship will start at the end of the first year and continue forever, what endowment must the donor make now?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.