The bank would like to set up a reserve fund. If the fund earns an effective annual rate of 8%. How much does the bank need in the fund today if the fund pays an amount of $20,000 today and grows by 3% per annum for an infinite period?

Select one:

a. $432,000.00

b. $400,000.00

c. $418,000.00

d. $453,000.00