Susan plans for her children and children's children to inherit a perpetual annual cash amount entitlement...

  

Transcribed Image Text:

Susan plans for her children and children's children to inherit a perpetual annual cash amount entitlement starting at some point in the future. Susan estimates that her investment will be worth one million 30 years from today (i.e., t-30). One year after year 30, (i.e., t-31), Susan wants her beneficiaries to receive an annual cash amount of $C, and for every year thereafter into the indefinite future, to receive the same cash amount $C. Given an interest rate of 7% per annum over the entire valuation horizon, what is the annual cash amount $C? A. $10,586.40 B. $70,000.00 C. $80,586.40 D. $131,366.12 E. $131,367.12 Susan plans for her children and children's children to inherit a perpetual annual cash amount entitlement starting at some point in the future. Susan estimates that her investment will be worth one million 30 years from today (i.e., t-30). One year after year 30, (i.e., t-31), Susan wants her beneficiaries to receive an annual cash amount of $C, and for every year thereafter into the indefinite future, to receive the same cash amount $C. Given an interest rate of 7% per annum over the entire valuation horizon, what is the annual cash amount $C? A. $10,586.40 B. $70,000.00 C. $80,586.40 D. $131,366.12 E. $131,367.12

Answer rating: 100% (QA)

Annual F 1i P Ca... View the full answer