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3. (15 pts) A permanent scholarship fund has been established through a donation of $500,000 at time zero, $100,000 in year one, $150,000 in year two, and amounts increasing by $50,000 per year through year ten. At an interest rate of 10% per year, the amount that could be withdrawn forever beginning in year 11 is nearest: A) $225,903 B) $385,931 C) $585,931 D) $2,259,000

3. (15 pts) A permanent scholarship fund has been established through a donation of $500,000 at time zero, $100,000 in year one, $150,000 in year two, and amounts increasing by $50,000 per year through year ten. At an interest rate of 10% per year, the amount that could be withdrawn forever beginning in year 11 is nearest: A) $225,903 B) $385,931 C) $585,931 D) $2,259,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3. (15 pts) A permanent scholarship fund has been established through a donation of $500,000 at time zero, $100,000 in year one, $150,000 in year two, and amounts increasing by $50,000 per year through year ten. At an interest rate of 10% per year, the amount that could be withdrawn forever beginning in year 11 is nearest: A) $225,903 B) $385,931 C) $585,931 D) $2,259,000
Transcribed Image Text:3. (15 pts) A permanent scholarship fund has been established through a donation of $500,000 at time zero, $100,000 in year one, $150,000 in year two, and amounts increasing by $50,000 per year through year ten. At an interest rate of 10% per year, the amount that could be withdrawn forever beginning in year 11 is nearest: A) $225,903 B) $385,931 C) $585,931 D) $2,259,000
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