In: Finance
Robert wishes to leave a provision in her will that $7000 will be paid annually in perpetuity to a local charity. How much must she provide in her will for this perpetuity if the interest rate is 6%?
Select one:
$116,667
$70,000
$58,334
$93,334
The amount is computed as shown below:
= Amount paid annually / Interest rate
= $ 7000 / 6%
= $ 116,667