A grateful donor wishes to start an endowment at her alma mater that will provide scholarship money

Question:

A grateful donor wishes to start an endowment at her alma mater that will provide scholarship money of $40,000 per year beginning now (time 0)

and continue indefinitely. If the funds earn 10% per year, the amount she must donate now is closest to:

a. $340,000

b. $400,000

c. $440,000

d. $493,800

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