Consider a fund with initial AUM of $100 million and an expected return of 10%.

Assume further that the appropriate required return (discount rate) for valuing fee

income is also 10%.If asset are expected to be withdrawn at a rate of 5% per year (i.e., at the end of

each year, after the fee has been paid, 5% of the remaining assets are withdrawn

from the fund) what are the present values of the infinite streams of fee income

at annual fees of 1% and 0.5%?