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?
Homework Answers
Current value of investment - cost of investment is $ 50000
Therefore 2.75 = $50000/cost of investment
Cost of investment = $ 1,818,181.8181
He need to invest $ 1,818,182 (rounded)
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