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Homework answers / question archive / Bill is interested in creating an ongoing annual endowment that gives Sheridan College $120,000 annually
Bill is interested in creating an ongoing annual endowment that gives Sheridan College $120,000 annually. How much money must he set aside today assuming an interest rate of 4%?
1). $125,000.00
2). $3,000.000.00
3). $2,577,862.15
4). $5.880,000.00
Computation of the present value:-
Present value = Annuity / Interest rate
= $120,000 / 4%
= $3,000,000
Correct option is 2). $3,000,000.00
