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Sam wants to fund a new scholarship for a deserving LCB student. She wants the scholarship to pay $5,000 annually towards tuition starting next year.

Sam wants to fund a new scholarship for a deserving LCB student. She wants the scholarship to pay $5,000 annually towards tuition starting next year. However, she realizes that tuition is likely to increase at the rate of 5% per year, and she wants the scholarship payment to keep up with expected tuition inflation. In other words, she wants the scholarship payment to always represent the same proportion of tuition. For example, she wants to pay out $5,250 in year two. Given that the interest rate is 8% and she believes this will continue indefinitely.



How much doe she need to fund this scholarship if she wants it to continue paying out forever?

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