11.2
2. Let’s say Phil Knight wants to endow the Nike
Professorship of Finance. He wants the professorship to pay
$100,000 every year forever. If interest rates are 7%, how much
money would he have to give today to endow the professorship? (1
pt)
If interest rates were lower, would it cost more or less to
endow the professorship? Why? (1 pt)
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