A Wealthy Inventor Has Decided to Endow Her Favorite Art

question 56

Multiple Choice

A wealthy inventor has decided to endow her favorite art museum by establishing funds for an endowment which would provide $1,000,000 per year for researchforever.The scientistShe will fund the endowment upon her fiftieth birthday 10 years from today.She plans to accumulate the endowment by making annual end-of-year deposits into an account.The rate of interest is expected to be 6 percent in all future periods.How much must the scientist deposit each year to accumulate to the required amount?

• A)$1,575,333
• B)$736,000
• C)$1,264,446
• D)$943,396

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Definitions:

Credibility

The quality of being trusted and believed in, often associated with accuracy and reliability.

Skepticism

An attitude of questioning or doubting the validity or authenticity of something supposed to be factual.

Illogical

Lacking sense or clear, sound reasoning; not following the principles of logic.

Inaccurate

Refers to something that is not correct or precise.