Question: Fred is setting up a trust fund for his son. The trust will pay his son $1,000 each year for the next 22 years. If

Fred is setting up a trust fund for his son. The trust will pay his son $1,000 each year for the next 22 years. If the trust fund earns 8 percent interest per year, how much does Fred have to put into the trust fund today in order to fund the series of annual payments? (Show your answer as a positive number).

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

TST102 Fundamentals of Test Evaluation Lesson 17 - Assignment Assignment 1: Developmental Test Planning You are designing a developmental test to verify that the SRAW safe-arm device (SAD) arms the...

1). Mike and Cindy are buying a new car, but they are on a budget. The think that they can afford to pay $408 per month for 5 years, based on an annual interest rate of 8.6 percent. How much can they...

(1). ABC expects sales of $21,830,000 this year. The cost of goods sold is expected to be $12,468,000 while selling, general and admin (SGA) expenses are forecast to be $4,114,000. The firm expects...

QUESTION 11 Match the IRR with the cash flows. CFO: -2,053 CF1: 605 CF2: 536 CF3: 673 CF4: 630 - CFO: -1,685 CF1: 601 CF2: 520 CF3: 528 CF4: 685 C- CFO: -2,053 CF1: 559 CF2: 535 CF3: 549 CF4: 573 -...

Fred is setting up a trust fund for his son. The trust will pay his son $2,000 each year for the next 34 years. If the trust fund earns 7.2 percent interest per year, how much does Fred have to put...

Fred is setting up a trust fund for his son. The trust will pay his son $6,000 each year for the next 20 years. If the trust fund earns 5.6 percent interest per year, how much does Fred have to put...

Fred is setting up a trust fund for his son. The trust will pay his son $9,000 each year for the next 19 years. If the trust fund earns 6.7 percent interest per year, how much does Fred have to put...

Fred is setting up a trust fund for his son. The trust will pay his son $5,000 each year for the next 17 years. If the trust fund earns 5.5 percent interest per year, how much does Fred have to put...

1 Suppose you deposit $2000 into an account at the end of each of the next 10 years. If the account earns 12%, how much will be in the account at the end of 30 years? 35,097 192,926 338,560 482,665 2...

Hi, looking for help on these questions related to financial management. Thank you. 1. Which of the following would least likely be considered as signaling a potential problem regarding the "quality...

Let a and b be fixed positive numbers and suppose that AP is part of the line that passes through (0, 0), with A on the line x = a and |AP| = b. Find both the polar equation and the rectangular...

Some hate it and some love it, but regardless of how you feel oil is still a key part of our daily lives. The average Canadian uses about 20 barrels of oil each year, equivalent to about one and a...

52. Calculating Present Value of a Perpetuity (LO1) Given an interest rate of 4.7 percent per year, what is the value at date t = 7 of a perpetual stream of $3,100 payments that begins at date t = 15?

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".