Business Maths Question

[Xenoris]

A college has set up a Year 11 perpetuity scholarship of $4000 a year. The deputy principal is able to get a
financial institution to offer a long-term interest rate of 8% per annum. The amount that needs to be
deposited into the scholarship fund is closest to

I use TVM solver on my CAS calculator to solve these usually:
But for this question I ran into troubles...
n=?
I%=8
PV=What we are trying to find
PMT= 4000
FV=0 i would think
P/Y=C/Y=1

Now from the information I cant figure out what the N is...
I assume it has something to do with the year 11 bit.

It's a multiple choice question and the answer is 50,000 (but its choose the closest to) so around 50,000

[brockjock]

no...

N=1
and
PV=FV
PV as a negitive and FV as a positive

and thefore because you know neither you can't calculate it...

[shokstar]

For a perpetuity there is a formula you use, P=(100Q)/r, where P is the amount invested, or the amount that needs to be deposited, Q is the amount per annum paid, $4000, and r is the interest rate per annum, 8%.

You only use the TVM solver for an annuity, reducing balance loan or investments where an amount is paid for a fixed term. A perpetuity is one where its indefinite, sort of hard to explain, but in the question if its a perpetuity they will always tell you, in which case you use that formula.

[Xenoris]

Thanks it worked