Carl is the beneficiary of a $21,000 trust fund set up for him by his grandparents....
Carl is the beneficiary of a $21,000 trust fund set up for him by his grandparents. Under the terms of the trust, he is to receive the money over a 5-year period in equal installments at the end of each year. If the fund earns interest at the rate of 2%/year compounded annually, what amount will he receive each year? (Round your answer to the nearest cent.) $
Homework Answers
Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate
21,000=Annuity[1-(1.02)^-5]/0.02
21,000=Annuity*4.71345951
Annuity=21,000/4.71345951
=$4455.33(Approx).
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Carl is the beneficiary of a $21,000 trust fund set up for him
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