Answer:
The correct answer is A.
Explanation:
Giving the following information:
As you’ve committed to fund a $5000 scholarship ever year beginning one year from tomorrow
You want to fund the scholarship forever, the account will earn 4.50% per annum every year.
We are in the presence of a perpetual annuity. We need to use the following formula:
PV= Cf/i
Cf= cash flow
PV= 5,000/0.045= $111,111.11