A Rich Donor Gives a Hospital $1,040,000 One Year from Today

question 37

Multiple Choice

A rich donor gives a hospital $1,040,000 one year from today. Each year after that, the hospital will receive a payment 6% larger than the previous payment, with the last payment occurring in ten years' time. What is the present value (PV) of this donation, given that the interest rate is 11%?

• A) $3,840,628.87
• B) $5,376,880.42
• C) $6,913,131.97
• D) $7,681,257.74

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Definitions:

Crick

Francis Crick, a British molecular biologist, biophysicist, and neuroscientist, known for co-discovering the structure of DNA along with James D. Watson.

Griffith's Transformation

A process discovered by Frederick Griffith in 1928, demonstrating that a substance from dead bacteria could genetically transform living bacteria.

Avery

Refers to Oswald Avery, a bacteriologist who was instrumental in demonstrating that DNA is the substance that causes genetic transformation.

Hershey

This could refer to Alfred Hershey, a bacteriologist known for the Hershey-Chase experiment which helped to confirm that DNA is the genetic material.