You would like to establish a trust fund that will provide $120,000 a year forev
ID: 2776913 • Letter: Y
Question
You would like to establish a trust fund that will provide $120,000 a year forever for your heirs. The trust fund is going to be invested very conservatively so the expected rate ofreturn is only 5.75 percent. How much money must you deposit today to fund this gift for your heirs? You would like to establish a trust fund that will provide $120,000 a year forever for your heirs. The trust fund is going to be invested very conservatively so the expected rate of
return is only 5.75 percent. How much money must you deposit today to fund this gift for your heirs?
Explanation / Answer
Amount per year 120,000.00 Interest Per Annum 5.75% Let money deposited be x 5.75% *x = 120000 x = 120,000/5.75% x = 2,086,956.52