You are the beneficiary of a trust fund that will start paying you cash flows in five years. The cash flows will be $25,000 per year, and there will be a total of 40 yearly cash flows paid. If the interest rate is 4% per year, what is the value needed in the trust fund now to fund these cash flows? Make sure to include a timeline
You are the beneficiary of a trust fund that will start paying you cash flows in five years. The cash flows will be $25,000 per year, and there will be a total of 40 yearly cash flows paid. If the interest rate is 4% per year, what is the value needed in the trust fund now to fund these cash flows? Make sure to include a timeline
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:You are the beneficiary of a trust fund that will start
paying you cash flows in five years. The cash flows
will be $25,000 per year, and there will be a total of
40 yearly cash flows paid. If the interest rate is 4%
per year, what is the value needed in the trust fund
now to fund these cash flows? Make sure to include
a timeline
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