Suppose you currently have no wealth or income, but will receive a $1,000,000 inheritance 15 years from today. You would like to borrow against this future windfall such that you spend equal annual amounts of $X each year, starting today (at t =0) and ending in 15 years (at t =15). If your bank charges you 5 percent annually to borrow money, what is the maximum amount, $X, that you can spend at each point in time?

Answer rating: 100% (QA)

So there are in all 16 payments that should be equa... View the full answer