Question
How much money is needed to establish a fund paying $80,000 annually forever with the first payment made immediately if the fund will earn interest
How much money is needed to establish a fund paying $80,000 annually forever with the first payment made immediately if the fund will earn interest at 5% p.a. compounded semi-annually?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
You can calculate the present value of this perpetuity using the following formula Present Valu...
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Step: 2
Step: 3
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
