Question $10$

A benefactor proposes to endow a chair in the Business School at lowa State University with a gift that will provide a salary of $$200,000$ in one year, which will grow constantly at $2\%$

per year forever. It will take a smaller donation to set up the chair today if:

A$.$ the annual growth rate is $3\%.$

B$.$ the first salary is smaller than $$200,000.$

C$.$ the interest rate earned by endowments is lower.

D$.$ Both $($B$)$ and $($C$)$ would make the donation smaller.