1) if the annuity you decided to invest is paying interest quarterly, what would your return be.

2) ( from answer one and the picture) What would be your effective interest rate on the two different investment approaches.

18. Having graduated from Delta State, you started a small business that grew and prospered. Success has been yours and, in reflection, you remember all the positive encouragement, instruction and guidance you received from the Business School during your college days. You decide that, in a way of saying thank you and acknowledging the impact DSU has had on your life, you want to start a scholarship fund to help other DSU students reach their dreams. You decide to invest $7,500 per year from your year end dividend income into an annuity fund paying 5% simple interest for 10 years so that you can start the "Norwood Entrepreneurial Scholarship Fund". At the reunion 10 years from now, what will you have to start the scholarship endowment