Martin wants to provide money in his will for an annual bequest to whichever of his living relatives is oldest. That bequest will provide $ 9 comma 000 in the first year, and will grow by 7 % per year, forever. If the interest rate is 10 %, how much must Martin provide to fund this bequest?

$300,00

Explanation:

In a situation where the interest rate is said to be 10% the amount that Martin must provide in order to fund this bequest will therefore be:

Bequest first year $9,000/(Interest rate 10%-

Increase of 7 % per year)

Hence:

$9,000/0.03

=$300,000

Therefore $300,00 will be provided to fund the bequest

answermarginal cost;