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:

Dominant Ideology

The set of beliefs, values, and norms that are most widely shared within a society, often reinforcing the current social power structure.

Meritocracy

A system or society where individuals are rewarded and advanced based on ability and talent rather than on class privilege or wealth.

Ideology

A system of ideas, beliefs, and values that reflects and supports the interests of a particular group or society.

Sociological Perspective

A view of society based on the dynamic relationships between individuals and the larger social network in which we all live.