Question: On January 1, 2010, Charles Jamison borrows $40,000 from his father to open a business. The son is the beneficiary of a trust created by

On January 1, 2010, Charles Jamison borrows $40,000 from his father to open a business.
The son is the beneficiary of a trust created by his favorite aunt from which he will receive $25,000 on January 1, 2020. He signs an agreement to make this amount payable to his father and, further, to pay his father equal annual amounts from January 1, 2011 to January 1, 2019, inclusive, in retirement of the debt. Interest is 12%.

Required
What are the annual payments?

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Step 1 Find the present value of the trust p 25000 p n10 i12 25000 0321973 804... View full answer

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