Sam wants to set up scholarships for his former secondary school graduating class. He has invested $100,000 into an account that pays 4.5% compounded quarterly. If the scholarships are $1,500 each and presented annually at graduation, how many scholarships can be awarded each year?

Learning Objectives

• Compute the financial value of various forms of annuities and perpetuities, encompassing ordinary annuities, annuities due, deferred annuities, and perpetuities with differing compounding frequencies.
• Comprehend the fundamentals of discounted cash flows to evaluate conditional sale contracts and various financial agreements.