A college received a contribution to its endowment fund of $2 million. They can never touch the principal, but they can use the earnings. At an assumed interest rate of 9.5 percent, how much can the college earn to help its operations each year?
A) $95,000
B) $19,000
C) $190,000
D) $18,000

Question

Quizplus · Accepted Answer

To find out how much the college can earn each year, we need to multiply the principal by the interest rate: 
$2,000,000 x 0.095 = $190,000 
So, the college can earn $190,000 each year to help its operations. Therefore, the correct answer is option C.

A College Received a Contribution to Its Endowment Fund of $2