   Chapter 6.4, Problem 33E ### Calculus: An Applied Approach (Min...

10th Edition
Ron Larson
ISBN: 9781305860919

#### Solutions

Chapter
Section ### Calculus: An Applied Approach (Min...

10th Edition
Ron Larson
ISBN: 9781305860919
Textbook Problem
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# Endowment In Exercises 31-34, determine the amount of money required to set up a charitable endowment that pays the amount P each year indefinitely for the annual interest rate r compounded continuously. See Example 5. P = $5000 , r = 7.5 % To determine To calculate: The charitable endowment amount that is set up to pay the amount P=$5,000 each year at the rate of annual interest as r=7.5% compounded continuously.

Explanation

Given Information:

An amount of P=\$5,000 is paid each year at the rate of annual interest as r=7.5% compounded continuously.

Formula used:

Present value of Perpetuity is given by:

Present value=0ertdt=Pr

Here, P is the size of each annual payment and r is the annual interest rate in decimal form.

Calculation:

Write the rate of interest in decimal form as:

r=7

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