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

---

Definitions:

Micronutrients

Essential vitamins and minerals required in small quantities for the proper functioning of the body's processes, including growth, development, and disease prevention.

Percentile

A point on a ranking scale of 0 to 100. The 50th percentile is the midpoint; half of the people in the population being studied rank higher and half rank lower.

Language Acquisition Device

A hypothetical module of the human mind posited to account for children's innate ability to acquire language rapidly as proposed by linguist Noam Chomsky.

Chomsky

Refers to Noam Chomsky, an influential linguist and cognitive scientist known for his theories on language acquisition.