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A wealthy individual wishes to establish a $1,000,000 trust fund to provide income for his grandchild in perpetuity. The trust agreement stipulates that the principal
A wealthy individual wishes to establish a $1,000,000 trust fund to provide income for his grandchild in perpetuity. The trust agreement stipulates that the principal of $1,000,000 may never be distributed, but the grandchild will receive the interest earned each year. If the trust fund is expected to earn 7% APR in all future periods, how much will the grandchild be able to receive each year?
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