Wise University expects to receive $100 next year from a new donor. They also expect this amount

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Question:

Wise University expects to receive $100 next year from a new donor. They also expect this amount to increase by 3 percent annually and to continue forever. Which formula will correctly compute the current value of this donation at a discount rate of 13 percent?

Select one:

A. ($100 × 1.03) / (0.13 – 0.03)

B. $100 / 0.13 + 0.03

C. $100 / (0.13 – 0.03)

D. $100 + ($100 × 1.03) / (0.13 – 0.03)

E. ($100 × 1.03) / 0.13