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You are head of the Schwartz Family Endowment for the Arts. You have decided to fund an arts school in the San Francisco Bay area in perpetuity. Every 3 ​years, you will give the school $ 1 comma 000 comma 000. The first payment will occur 3 years from today. If the interest rate is 10.1 % per​ year, what is the present value of your​ gift?

Respuesta :

facundobuzzetti

Answer:

PV=  $749,269.48

Explanation:

Giving the following information:

Every three years= $1000000

i= 10,1%

The first payment will occur 3 years from today.

We need to find what is the present value of the​ gift

Using the following formula:

PV= FV/[(1+i)^n)

PV= 1000000/[1,101^3]= $749,269.48

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