Question

You plan to create a trust fund that can provide $100,000 per year, forever. If the...

You plan to create a trust fund that can provide $100,000 per year, forever. If the first payment of $100,000 needs to make five years later and annual expected return on your capital is 4%, you will need to prepare $Answer. (no thousand separator , in the number, rounded with 2 decimals)

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Value(P4) Annual Payment/Required Return 100000/0.04 $ 2,500,000.00 11 Present Value(PO) P4/(1+Required Return)^4 2500000/(1+

Add a comment
Know the answer?
Add Answer to:
You plan to create a trust fund that can provide $100,000 per year, forever. If the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • ou would like to establish a trust fund that will provide $50,000 a year forever for...

    ou would like to establish a trust fund that will provide $50,000 a year forever for your heirs. The trust fund is going to be invested very conservatively so the expected rate of return is only 2.75 percent. How much money must you deposit today to fund this gift for your heirs?

  • Your grandparents would like to establish a trust fund that will pay you and your heirs $160,000 per year forever with t...

    Your grandparents would like to establish a trust fund that will pay you and your heirs $160,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.1 percent, how much must your grandparents deposit today?

  • your grandparents would like to establish a trust fund that will pay you and your heirs...

    your grandparents would like to establish a trust fund that will pay you and your heirs 145000 per year forever with the first payment one year from today. if the trust fund earns an annual return of 2.8 percent how much must your grandparents deposit today

  • Your grandparents would like to establish a trust fund that will pay you and your heirs...

    Your grandparents would like to establish a trust fund that will pay you and your heirs $170,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.3 percent, how much must your grandparents deposit today? Multiple Choice O $5,887,445.89 54292,929.29 C) $4755,244.76 54,507,575.76

  • Imari wants to establish a charitable foundation that will make annual scholarship payments forever. Imari wants...

    Imari wants to establish a charitable foundation that will make annual scholarship payments forever. Imari wants the foundation to make the first annual scholarship payment in 4 years from today, she wants that first scholarship payment to be 22,410 dollars, and she wants annual scholarship payments to increase by 3.79 percent per year forever. To fund the foundation, Imari plans to make equal annual savings contributions for 3 years. How much does Imari need to save each year for 3...

  • You would like to setup a trust fund for your two children to ensure that they...

    You would like to setup a trust fund for your two children to ensure that they will be taken care of in the future. At the end of this year, you would like each of your children to receive $20,000 (2 x $20,000= $40,000 payment received at the end of the year), and you would like to have this amount grow at the rate of inflation, (which will be assumed to be 3.5% forever) How much do you need to...

  • You have determined that you will need SEK 3,000,000 when you retire in 40 years. You...

    You have determined that you will need SEK 3,000,000 when you retire in 40 years. You plan to set aside a series of payments each year in an account yielding 5.0 % per year to reach this goal. You will put the first payment in the account one year from today, and the payments will grow with your income by 2.5% per year. a.) Calculate your first annual payment into this account. The first annual payment is kr. (round to...

  • You plan to retire in exactly 20 years. Your goal is to create a fund that...

    You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive S$20,000 at the end of each year for the 30 years you will live after retirement. You know that you will be able to earn 1 1% per year during the 30-year retirement period. How large a fund will you need when you retire in 20 years to provide the 30- year, S20,000 retirement annuity? a. How much will...

  • If you are willing to pay $46,850.00 today to receive $4,341.00 per year forever then your...

    If you are willing to pay $46,850.00 today to receive $4,341.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. If you are willing to pay $20,509.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 7.00% discount rate. What discount rate would make you indifferent between receiving $3,727.00 per year forever and $5,271.00 per year...

  • If you are willing to pay $44,793.00 today to receive $4,189.00 per year forever then your...

    If you are willing to pay $44,793.00 today to receive $4,189.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. If you are willing to pay $29,453.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 15.00% discount rate. What discount rate would make you indifferent between receiving $3,526.00 per year forever and $5,610.00 per year...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT