You Have Decided to Endow a Chair in Finance at Whatsamatta

question 33

Multiple Choice

You have decided to endow a Chair in Finance at Whatsamatta University.How much money must you deposit into the endowment account today if the Chair pays $125,000 per year forever (first payment one year from today) and is invested at a rate that pays out 4.50% per year?

• A)$277,777.78
• B)$2,902,777.78
• C)$2,777,777.78
• D)There is not enough information to answer this question.

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