A college has a scholarship fund that pays a sum of money twice a year. The scholarship will pay out 500 at the end of six months and another 500 at the end of one year. Every year thereafter, the two semi-annual payments will be increased by 10. For example, in year two, both payments will be 510 and in year three both payments will be 520. The scholarship fund earns interest at an annual effective interest rate of 7.5%. Calculate the fund balance needed today to provide this scholarship indefinitely. (A) 16,000 (B) 16,589 (C) 16,889 (D) 17,134 (E) 17,200

A college has a scholarship fund that pays a sum of money twice a year. The scholarship will pay out 500 at the end of six months and another 500 at the end of one year. Every year thereafter, the two semi-annual payments will be increased by 10. For example, in year two, both payments will be 510 and in year three both payments will be 520 . The scholarship fund earns interest at an annual effective interest rate of 7.5%. Calculate the fund balance needed today to provide this scholarship indefinitely. (A) 16,000 (B) 16,589 (C) 16,889 (D) 17,134 (E) 17,200