The amount of money deposited 25 years ago at 5% interest that would now provide a perpetual payment of $15,000 per year is closest to

Question

asked Aug 24, 2018 146k views

1 Answer

← Prev Question Next Question →

Ask a Question

Acroscene · Answer 1 · 2018-08-30T11:22:18+0000

The amount of money needed now to begin the perpetual payments is
P = A/I =15,000÷0.05=300,000

The amount that would need to have been deposited 25 years ago is
P=A÷(1+r)^t
P=300,000÷(1+0.05)^(25)
P=88,590.83

The amount of money deposited 25 years ago at 5% interest that would now provide a perpetual payment of $15,000 per year is closest to

Please log in or register to add a comment.

Please log in or register to answer this question.

1 Answer

Please log in or register to add a comment.

No related questions found

Categories

Other Questions