A college received a contribution to its endowment fund of $2 million. It can never touch the principal, but 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 the amount the college can earn each year, we need to calculate 9.5% of $2 million:
0.095 x $2,000,000 = $190,000
Therefore, the college can earn $190,000 each year to help its operations. The correct answer is choice C.

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