Question

You want to establish a trust fund that will provide $50,000 a year forever for your heirs. If the fund can earn a guaranteed rate of return of 4.5 percent, how much must you deposit in a solitary lump sum to establish this trust?

Answer 1

$1,111,111.11.

Step-by-step explanation:

PV = $50,000 / .045 = $1,111,111.11.