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Pursuant to a property settlement agreement, Victor transfers $ 1 , 0 0 0 , 0 0 0 in trust for the benefit of his

Pursuant to a property settlement agreement, Victor transfers $1,000,000 in trust for the benefit of his former wife. The trust provides that the income of the trust is to be paid to his former wife for her lifetime, with the remainder passing to Victor or his probate estate. Assuming Victor's former wife is age 40 at the time of the trust funding, what is the actuarial value of her life estate? Assume, alternatively, that the prevailing Federal midterm rate is 3.6% and 5.6%.

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