George Jefferson established a trust fund that provides $150,000 in scholarships each year for worthy students. The trust fund earns a 4.25% rate of return. How much money did Mr. Jefferson contribute to the fund assuming that only the interest income is distributed?

Question

Quizplus · Accepted Answer

To find the principal amount contributed, divide the annual scholarship amount by the rate of return: $150,000 / 0.0425 = $3,529,411.77.

George Jefferson Established a Trust Fund That Provides $150,000 in Scholarships