You have been awarded a scholarship that will pay you $600 per semester at the end of each of the next 8 semesters that you earn a GPA of 3.5 or better. You are a very serious student and you anticipate receiving the scholarship every semester. Using a discount rate of 5% per semester, which of the following is the correct calculation for determining the present value of the scholarship?
A) PV = $600 × 5% × 8
B) PV = $600 × (Annuity PV factor, i = 5%, n = 8)
C) PV = $600 × (Annuity FV factor, i = 10%, n = 4)
D) PV = $1200 × (PV factor, i = 5%, n = 4)
Correct Answer:
Verified
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