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Susie Bigshot has decided to fund an endowment to pay $100,000 in Real Dollars once every three years in perpetuity at her favorite Nature Center.
Susie Bigshot has decided to fund an endowment to pay $100,000 in Real Dollars once every three years in perpetuity at her favorite Nature Center. By using Real Dollars she hopes to provide enough money to cover how inflation will impact costs. She will make the first $100,000 payment three years from today and each subsequent payment will be made after every three years. If the annual nominal rate on endowment investments is 6% and the inflation rate is 2.5% how much cash will she need to contribute to the endowment today? Group of answer choices $919,812 $1,666,667 $943,603 $2,928,571
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