You Have Decided to Endow a Chair in Finance at Whatsamatta

question 24

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 (first payment one year from today) ,increases at a rate of 2% per year forever,and is invested at a rate that pays out 4.50% per year?

• A)$2,777,777.78
• B)$2,902,777.78
• C)$5,000,000.00
• D)There is not enough information to answer this question.

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A condition caused by abnormalities in an individual's DNA, affecting various body functions and characteristics.

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Feelings of discomfort or weakness caused by a lack of food, often signaling the need to eat.

Body Mass Index

A measure of body fat based on height and weight that applies to adult men and women, used to categorize underweight, normal weight, overweight, and obesity.

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