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Harry Smith's grandparents want to set up an endowment for him. Based on the agreement, Harry Smith can obtain $100,000 yearly once he passes 18
Harry Smith's grandparents want to set up an endowment for him. Based on the agreement, Harry Smith can obtain $100,000 yearly once he passes 18 (the first payment is on his 18th birthday). If the interest rate is fixed at 5% and Harry Smith has just passed his 5th birthday, how much money needs to be set aside today?
a) $1,227,826.51
b) $1,169,538.58
c) $1,113,674.83
d) $1,060,642.70
Please show your work so I can understand HOW to solve the problem on my own!
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