answer Q 32

A charitable foundation has $500,000 invested in an account that earns 7%. The foundation has promised to begin making annual payments to beneficiaries in one year, and the first payment will be $25,000. The foundation has promised that future payments will grow at a constant rate forever. At what rate can the foundation afford to increase payments assuming that it makes no additional deposits into the account? Select one: O a. 2% O b. 1% O c. 0%; it can't afford to increase payments forever without adding more money to the account. O d. 3%