A Wealthy Benefactor Has Donated $1,000,000 to Establish a Perpetuity

question 44

Multiple Choice

A wealthy benefactor has donated $1,000,000 to establish a perpetuity that is to pay a constant payment once per month. The money will earn 10% compounded annually. The first monthly perpetual payment will be made 28 months from now. Determine the size of the payments.

• A) $9,960
• B) $10,000
• C) $9,881
• D) $8,603
• E) $10,047

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Definitions:

Arthropods

A large group of invertebrate animals characterized by their segmented bodies, exoskeleton, and jointed limbs, including insects, arachnids, and crustaceans.

Earthworms

Invertebrate organisms belonging to the phylum Annelida, known for their role in soil aeration and composting.

Hemocyanin

A copper-containing protein found in the blood of some invertebrates, like mollusks and arthropods, serving as an oxygen carrier.

Diffusion

The movement of molecules or particles from an area of high concentration to an area of low concentration.