A generous benefactor to the university plans to make a one-time endowment which would provide the school with $50,000 scholarship per year into perpetuity. The rate of interest is expected to be 5% for all future time periods. How large must the endowment be?

1. $250,000
2. $500,000
3. $1,000,000
4. none of the above; the correct answer is _____