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A Wealthy Benefactor Has Donated $1,000,000 to Establish a Perpetuity

Question 44

Multiple Choice

A wealthy benefactor has donated $1,000,000 to establish a perpetuity that is to pay a constant payment once per month. The money will earn 10% compounded annually. The first monthly perpetual payment will be made 28 months from now. Determine the size of the payments.


A) $9,960
B) $10,000
C) $9,881
D) $8,603
E) $10,047

Correct Answer:

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