Clarissa Wants to Fund a Growing Perpetuity That Will Pay

question 67

Multiple Choice

Clarissa wants to fund a growing perpetuity that will pay $5000 per year to a local museum,starting next year.She wants the annual amount paid to the museum to grow by 5% per year.Given that the interest rate is 8%,how much does she need to fund this perpetuity?

• A)$62,500.00
• B)$102,112.33
• C)$143,445.65
• D)$166,666.67

---

Definitions:

Antitrust Law

Legislation designed to promote competition and regulate and prevent monopolies or other practices that restrain trade.

Legal Cartel Theory

A concept that explores the legality and economic implications of a group of firms controlling the market by regulating prices and output like a cartel.

Occupational Licensing

The laws of state or local governments that require that a worker satisfy certain specified requirements and obtain a license from a licensing board before engaging in a particular occupation.

Antitrust Legislation

Laws and regulations designed to promote competition and prevent monopolies or oligopolies by regulating anticompetitive practices among companies.