Question
You want to fund a trust that will pay out $4,000 starting in 1 year. Each year thereafter, forever, the amount paid out will increase
You want to fund a trust that will pay out $4,000 starting in 1 year. Each year thereafter, forever, the amount paid out will increase by 2.5%. In year 2, therefore, the trust will pay out $4,100. Assume the interest rate is always 4.0%.
How much do you need to place in the trust today to make this happen?
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Contemporary Economics An Applications Approach
Authors: Robert Carbaugh
8th Edition
1138652199, 978-1138652194
