2 You have been awarded a scholarship that will pay you 500

2. You have been awarded a scholarship that will pay you $500 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 3% per semester, which of the following is the correct calculation for determining the present value of the scholarship? PLEASE STATE WHY YOU CHOSE THE ANSWER THAT YOU DID.

A) PV = $500

Solution

B is correct, because the question asks for the present value of $500 per semester, at a discount rate of 3% per semester, and for 8 semester. That is exactly what B calculate.