A Wealthy Inventor Has Decided to Endow Her Favorite Art

question 72

Multiple Choice

A wealthy inventor has decided to endow her favorite art museum by establishing funds for an endowment which would provide $1,000,000 per year forever. She will fund the endowment upon her fiftieth birthday 10 years from today. She plans to accumulate the endowment by making annual end-of-year deposits into an account. The rate of interest is expected to be 6 percent in all future periods. How much must the scientist deposit each year to accumulate to the required amount?

• A) $1,575,333
• B) $736,000
• C) $1,264,446
• D) $943,396

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