Chapter 6.4, Problem 34E

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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.*

To determine

**To calculate:** The charitable endowment amount that is set up to pay the amount

Explanation

**Given Information:**

An amount of

**Formula used:**

Present value of Perpetuity is given by:

Here,

**Calculation:**

Write the rate of interest in decimal form as:

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