A Charitable Foundation Has $500,000 Invested in an Account That

Multiple Choice

A charitable foundation has $500,000 invested in an account that earns 7%.The foundation has promised to begin making annual payments to beneficiaries in one year,and the first payment will be $25,000.The foundation has promised that future payments will grow at a constant rate forever.At what rate can the foundation afford to increase payments assuming that it makes no additional deposits into the account?

A) 0%; it can't afford to increase payments forever without adding more money to the account.
B) 1%
C) 2%
D) 3%