MC Qu. 6-A13 George Jefferson established a trust fund that provides... George J

Question

MC Qu. 6-A13 George Jefferson established a trust fund that provides...

George Jefferson established a trust fund that provides $171,500 in scholarships each year for worthy students. The trust fund earns a 2 percent rate of return. How much money did Mr. Jefferson contribute to the fund assuming that only the interest income is distributed?

George Jefferson established a trust fund that provides $171,500 in scholarships each year for worthy students. The trust fund earns a 2 percent rate of return. How much money did Mr. Jefferson contribute to the fund assuming that only the interest income is distributed?

Explanation / Answer

Contributions from Mr. Jefferson = $171,500 / 0.02 = $8,575,000

Therefore option (a) $8,575,000 is the correct answer.

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