A Generous Benefactor to the Local University Plans to Make

question 120

Multiple Choice

A generous benefactor to the local university plans to make a one-time endowment which would provide the university with $150,000 per year into perpetuity.The rate of interest is expected to be 5 percent for all future time periods.How large must the endowment be?

• A)$300,000
• B)$3,000,000.
• C)$750,000.
• D)$1,428,571.

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