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B4-20 (book/static) Question Help You are head of the Schwartz Family Endowment for the Arts. You have decided to fund an arts school in the
B4-20 (book/static) Question Help You are head of the Schwartz Family Endowment for the Arts. You have decided to fund an arts school in the San Francisco Bay area in perpetuity. Every 5 years, you will give the school $1,000,000. The first payment will occur 5 years from today. If the interest rate is 8.0% per year, what is the present value of your gift? The PV of the gift is $2130833. (Round to the nearest dollar.) X X That's incorrect. The cash flows are a perpetuity, so by the perpetuity formula: PV = r - OK You are head of the Schwartz Family Endowment for the Arts. You have decided to fund an arts school in the San Francisco Bay area in perpetuity. Every 5 years, you will give the school $1,000,000. The first payment will occur 5 years from today. If the interest rate is 8.0% per year, what is the present value of your gift? The PV of the gift is $2130833. (Round to the nearest dollar.)
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