Mr. Warren Buffet, the second richest man in the world, in June 2006 decided to donate 85% of his $44 billion fortune to Bill & Melinda Gates foundation in installments of $ 1.5 billion every year. Mr. Buffet stipulated that the annual payments must be distributed to the beneficiaries within a year before the subsequent payment is made. If Mr. Buffet did not stipulate the condition and instead, Gates Foundation decided to invest the annual contribution at 8% and spend the aggregate sum only upon receiving the entire contribution promised, what amount will the foundation have at the end?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Mr. Warren Buffet, the second richest man in the world, in June 2006 decided to donate 85% of his $44 billion fortune to Bill & Melinda Gates foundation in installments of $ 1.5 billion every year. Mr. Buffet stipulated that the annual payments must be distributed to the beneficiaries within a year before the subsequent payment is made. If Mr. Buffet did not stipulate the condition and instead, Gates Foundation decided to invest the annual contribution at 8% and spend the aggregate sum only upon receiving the entire contribution promised, what amount will the foundation have at the end?
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