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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
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 five years, you will give the school $1 million. The first payment will occur 5 years from today. If the interest rate is 8% per year, what is the present value of your gift?
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